LIBRARY OF CONGRESS 


































































* cd, •-tFT* A <^ 

« - '^C\ .«& _ t > a - <P 


\j * r s 


o " 


o A*** o wyw^Vw * c5' s 'f\ •* ' 

* ♦* ** cw> / a •- 

A <V * G v cd 

A • t ' a * ^ ^Cr c 0 " o -» **o 


& * 

.u >3> 

'%> r cr { «:s/o 

Co. G * A^W, ., ^ ^- 

*£,. A o\x < ^^ll\ «• <*+ A> S 

• o > •, 


’- Co* .°<^kt. ’’bv' 

* A o. > * <0^. 

® ^ ^ ' <#* *" 
' ca cv *• ** -0 

-•■ ,v °^ * • ■ ’ • a 0 

v •;•»- =\, a? ’ 


vv 

Av* * <A */* -» ' 

lA ^ O xOf\F * • 

v> <> '••A' A v cd, **tvT* « 

* G , l I • •<£Q» O * « ^ *^0 yA 

<r *'*■/&£: %-. <- .’.^ssw. ° .-r 

k n dc(l/AA> •> 



" 1 f 'V 

^0 v’ww* ^ V v ^ * * * °* # 

C-V •Jjngl' AA 

» v \ 'JW* /\ v®K-- A\ ° 

C '• • * * A° C a <v 

. V»» CS> rA . o««. ^ si' 


A 0 0 » 0 < v 

A? AVL> C v % 
r ,‘XSiiX'. •*. .-& * 



,0 c •- 
•> ’t* .cr ««" •» "C 

’7 \ , c ,-^'. 0 


^ Co< 
: • 1 /*-\ 



v 1 
^ -G *■ 1 

* ^ 

V^ v : A^rZX^p - ,* 

A <. *'o,A** vf!s 41 A <C 

> v % , 0 ^ c«:%/ 0 





v % cv Ap v *CVL> 



° ^5 ^ 

_ j> \\NS> > K> * 

rv ^ r-6. v 'J^vY- 5 * <1 ^ O 

A ^ o « o 0 

^ “' ^ A* 5 'H/^- > ‘ 

■V .M/A ° ® 

j\ 

'?*■ 



cd 4 , 'V J . * s A <-> 'o. . - G^ \d 

4f \G , L » * ^ Q 1 * 0 w o ^ 

<•* . ^ 11 / i ^y»-« _ V' ^ _ _tsf\»y <«• 



__ «=«_— ♦ 

AAvM^r > * r & w 0 <£>«* 

’ «y o -aw&s a %> *yw^s / 

. & *u * *' 1 * f 0 ^ *°»° / 

^ ^ Y * °- c\ ,0^ ^ s *-l% V % f * • <v 

* C<y. aV ^ rCC\ /H. 0 / *rCC\»KA. 

GvP r '^E^? 


o V 

*0 v*. * * 4 0 

^ 4+ * VT^sC w o <a? *0 

y> X- ^^Uvvv^ ' fs/ * 

■> rv < p U ■* '*Csr- 5 ^ * <i_ ( O 

a° <j> * o H o° <y O * « , 1 * A 

aT O V % ^ 

- 


o» ~ *< a j AN\ \vry/ vyz * 

aV oVJIak* v •^liS^* 

— r -..» v> G ^o. A , ‘ G o * .. $ 4 v 

O' 0 " ° y» ^Q y ^ t / « <f_ QV O" ° „ "^O . G 

c g> s» y^/rPp^ v r * c ^v ^ o .A 

, O V O p j^Vr^C-/7\ * + 


» ^ « 
I - V* 0 ^ 

* 4 ^ 


r < O 

O yl > 


' ^ r> ^ ^ ^\\\vv F 

• *0 

A a v;'. > v % 


S, O 

y <y ^ 



A : ^AA A 7 

o ,0 V s s ’*'* 

‘ ^r» C/ * zSmZx 

0 ^ G S 0 -^ilfe 


"> v N ^ • °* 

v \a Sdkhjj: 

: A% °.W0> : /% V* 

A ^ 'o. * - G^ CD s 5 A 'o. „ - 

- O 'LytTtZ' ^ G * C r c^Vv> O sLyml* ^ 

» A *■ yj sffi^ P^L* A “> ^ A *“ 

• 0 > • ■* A 0 . ^w^rr%^ . o > • i 


^5°^ 


« ^ y"P- 

o V 

A c * f o° c '.. ^,. < 

•’**- C> A V **V'y V "> V % 

y (< ^1 m x {> ^ ^^4/Zf^,. ^ -v - 

,A% ’ Vc^ .*^®-. -S-.A * 


*°’ 7 '^ .'VTO^ > (,v 

. *•■’* ^ U V '*..•’* A 'b 

A A .'<&&• % s c - * • 

> ; c^4 v : ^ 


cP a C 

A* ^Cjy. • 

A <*» • 



, w A 


'. '°o 

“o v° : < ^ftf" ' r o v °‘^M'. "bv 

^ « IIIW5CX ^5 °<* ” ^° 'tc G 0 t|^^ o A ^ > ^w\‘ x° -c, 

X. ^^Uvvxna 1 ' v v * ^y// Van j. ^ ^ «^%iU\\vo> ' k » «• < z^y//i/dr C _ ^ “> 

^'-•«•’* A °° *'"’’A° 'C. J *=»o»* # “^ **••.’•’a°° c> 

■ •_A/» > v s .’•«- c\ ,o~ ,»••'♦ > v f "°. %> si ,<••. “ 

A * AixAy//yL, cpG 0 " Vv * ^wmc 0 ^G b °^F 

* :^sa^. .a^ 'Ww§y; A A : .^Ew* ❖A •%»• 

.. V y^<CsV * 4» V)^ # «!’ ■* A' CyN. ti K/ ^SS. \N * 

• ^ gj ■* •a. v »• > 

A u '••*'<> <x *0 . * * ,G C ,, s 5 A 

A n*o, A- a\ t ,. ^ A 0 N o *Zc 

, 4 . ^M„V ° A A^b A - C . • V^C'y C 




0 -o 5 ^<y 

_ . «.r O V^z^v A 

^ v v »» r * °»- o 

A* A v 

* SaAZAvA 


^G' 

V ^ °»-(g'2)'A 

C . . s s A <A ~o* ** 

r O jA • «• ' * * <*C O 7 ^ 

«■ o y v rryA r V s '•'^ 

* A * &tiF/Z?* 2 . . -» 

w v ^c A V y 

« Or * S 





0 o v . 1 

X° VC •, 

y tAA/MSg 1 > ^ Ma » 

^ * 0 * 0 0 ^ ^ * *' 1 * ^° ^ 

^ V v f' *°' o. «0~ » 

* %<A aA ♦ A Kg A° A ♦ T 


, ^ A 

*. ^o V^ 


« • * 








^ oWMAF* <t? ^ 

^ +?*&$&''> „ * ^ * «» « ,<?- V <i* 

< ' . o * * A <\. *o,>* 0 O 

Or c 0 " ° * ^o _A •'■'•’+ ^U> , Cr c °_" ° * ^o 

C •_ s «SKW\. ° <4 S#r{!7Z?^ , C 

* ' -fy 0 <5 


V 



-t- *y 


•v ' 

l a _ <9 ^ 

• 

i 


* J&n) 

\ &TI// 

o 

t/ts *y 

yyyy> ” v 



1 w"i iwxssn^~ r v- **» „ <^/yz/n\ '%y > v <£■ 

'J^pV «.r o \^«V S) ■% *, 

>'— J ..... \ ' 

« • ^ f 

* ^ ^ ,Y/MW. <£ ^ 
«, -..<• A 

o " o „ ^ 0 jV 

<T 


%v 

,¥§®#|V 'K 

^ -mi/i . * ^ 

A u O **.. s' A 

0^ 0 0 N 0 4 ^o ,A • t 1 « ^ 

++# ;*S»’. : 

>' V. * 

° * 0 J A' 0j 

> A 


*3 O 


WV' V^’/ i v*~*v 

.0 V ,*Vf* V V -' ■ • - 

A u- - - 

^ ^ - 

^v 1 


^ * 





































ACDA/E-156 
december 1970 



Economy to Reductions 
in Military Spending 


Edited by Bernard Udis, University of Colorado 


Authors: Graham T. Allison 

Emile Benoit 
Kenneth E. Boulding 
John H. Cumberland 
Robert T. Crow 
Darwin W. Daicoff 
B. Curtis Eaton 
Amitai Etzioni 
Lawrence R. Klein 
Kei Mori 
Bernard Udis 
Murray L. Weidenbaum 


Prepared for the 

UNITED STATES ARMS CONTROL AND DISARMAMENT AGENCY 










Authors: 


Graham T. Allison, Associate Professor of Politics, 

Kennedy School of Government, Harvard University 

Emile Benoit, Professor of International Business, 
Columbia University 

Kenneth E. Boulding, Professor of Economics, 

University of Colorado 

John H. Cumberland, Professor of Economics, 

University of Maryland 

Robert T. Crow, Associate Professor of Economics, 

State University of New York, Buffalo 

Darwin W. Daicoff, Professor of Economics 
University of Kansas 

B. Curtis Eaton, Assistant Professor of Economics, 
University of British Columbia 

Amitai Etzioni, Professor and Chairman of Department 
of Sociology, Columbia University 

Lawrence R. Klein, Benjamin Franklin Professor of 
Economics, University of Pennsylvania 

Kei Mori, Professor of Economics, Keio University 
(Tokyo) 

Bernard Udis, Professor of Economics, University of 
Colorado 

Murray L. Weidenbaum, Professor of Economics, Washington 
University, St. Louis (on leave), Assistant 

Secretary of the Treasury for Economic Policy 

Advisory Board : 

Julius Margolis, Director, Fels Institute of Local 

and State Government, University of Pennsylvania 

Richard R. Nelson, Professor of Economics, Yale 
University 

Joseph A. Pechman, Director of Economic Studies, 
Brookings Institution 

Adam Yarmolinsky, Professor of Law, Harvard University 


111 






STATEMENT OF ATTRIBUTION AND DISCLAIMER 


This report was prepared under a contract with the 
United States Arms Control and Disarmament Agency. 
The judgments expressed in this report are those 
of the authors, and do not necessarily reflect the 
views of the United States Arms Control and Dis¬ 
armament Agency or any other department or agency 
of the United States Government. 


ACDA/E-156 


TABLE OF CONTENTS 

Page 

I. OVERVIEW AND SUMMARY - Bernard Udis 1 

Introduction 1 

Future Military Budgets and Their 
Economic Consequences 5 

Review of Findings 13 

Policy Alternatives and Their Implications 33 

II. THE MANY DIMENSIONS OF THE MILITARY EFFORT - 

Bernard Udis and Murray L. Weidenbaum 43 

Overall Military Spending 43 

Geographical Distribution 44 

Industrial Distribution 45 

Characteristics of Defense Manpower 47 

Research and Development and Military 
Spending 49 

Military Programs and Social and 
Technological Innovation 51 

A Comparison of the Vietnam and Korean 
Mobilizations 54 

Some Possible Long-Run Consequences of 
Military Spending 57 

Tables 60 

III. THE IMPACT OF DISARMAMENT ON AGGREGATE 

ECONOMIC ACTIVITY - AN ECONOMETRIC 

ANALYSIS - Lawrence R. Klein and Kei Mori 93 

The Meaning and Uses of an Econometric 
Model 94 

The Econometrics of Disarmament-Control 
Solution 98 

The Econometrics of Disarmament-Post 
Vietnam Solutions 102 

Some Caveats and Conclusions 118 

IV. DIMENSIONS OF THE IMPACT OF REDUCED 

MILITARY EXPENDITURES ON INDUSTRIES, 

REGIONS AND COMMUNITIES - John H. 

Cumberland 121 

Identification, Measurement and 
Projection of Regional Economic Impacts 121 


v. 



ACDA/E-156 

TABLE OF CONTENTS (continued) 


Page 


The Nature of Regional Impacts 121 

Selected Problems in the Identifica¬ 
tion, Measurement and Projection of 
Regional Economic Impacts 128 

Recent Contributions to Impact 
Analysis 120 

Dimensions of the Impacts: Some 
Empirical Projections 142 

Evaluation of the Regional Projections 205 
Improving Future Regional Economic 
Projections 207 

Existing Programs and Recommendations for 
Alleviating Regional Economic Impacts from 
Reductions in Defense Expenditures 210 

Policy Considerations in the Allocation of 
Resources Released from Military Use 215 

Appendix A 220 

Appendix B 231 


MILITARY EXPENDITURES AND THE ECONOMIC GROWTH 


OF THE NORTHEAST CORRIDOR - Robert T. Crow 282 

Introduction 282 

A Note of Caution 284 

Military Spending Alternatives 285 

The Northern Region 287 

The Central Region 292 

The Southern Region 298 

A Summary of the Results 303 


THE COMMUNITY IMPACT OF MILITARY 
INSTALLATIONS - Darwin W. Daicoff 
Introduction 
General Discussion 
Extant Installations 
Curtailed Installations 
Conclusion 

Policy Recommendations 


304 

304 

306 

307 
310 

322 

323 



ACDA/E-156 


TABLE OF CONTENTS (continued) 

Page 


VII. THE ADJUSTMENT OF DOD CIVILIAN AND 325 

MILITARY PERSONNEL - Darwin W. Daicoff 
Introduction 325 

Civilian 327 

Military 331 

The Pentagon's Effort 335 

Conclusion 336 

Appendix 337 

Policy Recommendations 341 

VIIL THE INDIVIDUAL AND THE DEFENSE MASS-LAYOFF - 

B. Curtis Eaton 342 

Contract Termination or Cancellation 342 

Severity of the Transition 345 

The Identification of Vulnerable 
Individuals and Groups 350 

Adjustment Processes 360 

Remedial Measures 366 

Research Needs 378 

Policy Conclusions 379 

IX. BALANCE OF PAYMENTS IMPACT OF A VIETNAM 

DISENGAGEMENT - Emile Benoit 381 

Preliminary Reservations 381 

The Nature of the Balance of Payments 
Impacts of the War 383 

The Peak Year of Vietnam Costs 384 

The Rise in U.S. Overseas Defense 
Expenditures and Related Aid 384 

Structural Impacts of Higher Defense 
Procurement 391 

The Import Bulge from Excess Demand 393 

Feedback Effects 394 

The Balance of Payments Impact of a 
Vietnam Withdrawal 396 


w w 

vil 


/ 



ACDA/E-156 


TABLE OF CONTENTS (continued) 

Page 

X. THE IMPACT OF THE DEFENSE INDUSTRY ON THE 

STRUCTURE OF THE AMERICAN ECONOMY - 

Kenneth E. Boulding 399 

XI. INTERGOVERNMENTAL RESOURCE TRANSFERS - 

Darwin W. Daicoff 434 

Introduction 434 

The Issue 433 

The Alternatives 438 

Fiscal Policy Lags 444 

Federal Grants and State Spending 447 

Conclusion 450 

XII. INDUSTRIAL ADJUSTMENTS TO MILITARY 

EXPENDITURES - Murray L. Weidenbaum 451 

Introduction 451 

Responses to Prior Cutbacks 456 

Contingency Planning in the Defense 
Industry 458 

Non-Military Diversification 458 

Alternative Methods of Diversification 463 

Evaluating the Obstacles to Diversifi¬ 
cation 468 

Another Approach: Public Sector Markets 474 
Defense Companies and Public Sector 
Markets 476 

Government Assistance Alternatives 487 

XIII. ORGANIZATIONAL AND ADMINISTRATIVE FACTORS 

AFFECTING SHIFTS IN DEFENSE EXPENDITURES - 

Graham T. Allison 492 

Introduction 492 

An Organizational Process Framework 500 

Potential Non-Military Uses of the 
Military 522 

Strategies for Minimizing 
Organizational Impediments 538 


• • 4 

viii. 



ACDA/E-156 


i 


TABLE OF CONTENTS (continued) 


Page 


XIV. SOCIETAL TURNABILITY: A THEORETICAL 


TREATMENT - Amitai Etzioni 547 

Introduction 547 

The Role of Consensus-Building 549 

Control 560 

The Turn-Around Options 568 


ix. 
































































ACDA/E-156 


OVERVIEW AND SUMMARY 


Bernard UdjLs 


I.1 INTRODUCTION 

The purpose of this study is to review the likely impact of reduced 
military expenditures on the economy of the United States and to 
identify some of the more pressing problems which may be encountered in 
the shift of resources from military to non-military uses. Reduced 
military spending has been assumed to result from some agreement limit¬ 
ing strategic weapons as well as from a cessation of hostilities in¬ 
volving U.S. troops in Indo-China. 

This effort was conceived by ACDA as a "comprehensive review of the 
domestic economic impacts of reduced military spending.” Past research 
in the subject area was to be carefully reviewed to identify existing 
gaps in data or analysis and to ascertain whether earlier conclusions 
and policies were still valid. The study then inventoried the existing 
state-of-the-art available to understand the nature of the adjustment 
process to reduced military spending. This state-of-the-art capability 
has been demonstrated by detailed application of advanced econometric 
techniques (models) in an effort to determine the size and nature of the 
adjustment problems which the U.S. would likely encounter in moving to 
lower levels of defense spending. An increased military budget was also 
incorporated into the study for purposes of comparative analysis and to 
highlight the different adjustment problems which such a change in the 
direction of defense spending might entail. 

The apparent correlation between rising defense spending and falling 
unemployment rates during the early years of World War II has suggested 
to some that a cause and effect relation may be inferred. The fact that 
equivalent increases in aggregate demand arising out of enlarged govern¬ 
ment spending on civilian purposes or from increases in private-sector 
spending would have been as effective or even more effective than 
military spending in reducing unemployment seems to have been lost on 
some portions of the population. At the apocryphal level, one hears 
of lapel buttons appearing in West Coast defense plants bearing the ad¬ 
monition "Don’t bite the War that feeds you!" The view is somewhat more 


1 


ACDA/E-156 


fully documented in public opinion surveys.^ 

If such a belief is widely held, it will constitute an obstacle to 
arms reduction which might at some time be deemed desirable on political 
and strategic grounds. One purpose of this study is to help marshall 
the facts for a full and impartial analysis of the implications of re¬ 
duced military expenditures. 

While the general conclusions of the analyses reported here suggest 
a relatively easy transition problem, they should be interpreted care¬ 
fully. Examination of projected employment and unemployment data for 
regions reveals that particular areas whose economies have become 
heavily dependent upon military expenditures will indeed face serious 
problems. Advance planning and intelligent cooperation by all the 
parties involved will be required to alleviate and possibly to prevent 
such conditions from developing. Similarly, the various compensatory 
policies assumed in the econometric models will also require advance 
planning for their successful implementation. They are not automatic 
and will require explicit action by policy makers including steps to 
improve data collection. No useful purpose would be served by glossing 
over such qualifications. Given these qualifications, however, it re¬ 
mains true that the economy of the United States possesses sufficient 
vitality and flexibility to absorb such reduced military spending as is 
assumed in this study without serious dislocations. 

This report is, of course, not the first to explore this area or to 
reach these conclusions. Similar opinions have been voiced by various 
panels of experts during the past decade.^ Most recently, a cabinet 


For example a Gallup survey in May 1964 asked people if they 
thought drastic reductions in military spending would lead to a serious 
depression. Of the 3522 respondents, 30 percent foresaw a depression, 
48 percent saw no depression and the remaining 22 percent had no' opin¬ 
ion. Age seems to be a critical variable since the percentage seeing 
a depression resulting from reduced military spending increased stead¬ 
ily with the age of the respondent. This suggests an echo effect 
from the days of the Great Depression. 

2 

See for example, Economic Impacts of Disarmament: A Report of 
the Panel on Economic Impacts of Disarmament , U.S. Arms Control and 
Disarmament Agency Publication No. 2 (Washington: Government Printing 
Office, January, 1962); The Economic and Social Consequences of Dis¬ 
armament: U.S. Reply to the Inquiry of the Secretary-General of the 
United Nations, with Revised Statistical Tables . U.S. Arms Control and 


2 












ACDA/E-156 


coordinating committee concluded that "the cost of war has been a load 
for the economy to carry-not a supporting ’prop*. Prosperity has not 
depended on the defense buildup and will not need high military spending 
to support it in peacetime." 

The field of economic adjustment resulting from changes in defense 
spending has experienced cycles of popularity. The decade of the 1960 f s 
saw the appearance of numerous studies of the consequences of reduced 
military spending. Interestingly, the literature of mobilization grew 
much more rapidly than that of demobilization during the prior decade.^ 
This probably reflected the concern that the Korean conflict might be 
the first exchange of World War III. The early 1960's saw the publica¬ 
tion of the report on Economic Adjustments to Disarmament sponsored by 
the Cente^ for Research on Conflict Resolution at the University of 
Michigan. A committee established by President Johnson in late 1963 
to study economic impact problems reported in the summer of 1965, just 
as the Vietnam engagement began its escalation. It concluded, among 
other things, that "neither the shifts from one kind of defense spending 
to another... nor the resumption of the gradual shift away from defense 

2 

(Cont.) Disarmament Agency Publication 21 (Washington: Government 
Printing Office, June, 1964). Also of interest is the parent document; 
see Economic and Social Consequences of Disarmament: Replies of Govern- 
ments and Communications of International Organizations, The Report of 
the Secretary General Transmitting the Study of His Consultative Group , 
Volume II (New York: United Nations, 1962). 

3 

Cabinet Coordinating Committee on Economic Planning for the End 
of Vietnam Hostilities, "Report to the President," in Economic Report of 
the President Transmitted to the Congress January, 1969 (Washington: 
Government Printing Office, 1969), pp. 187-211, especially p. 187. 

4 

See Lester V. Chandler and Donald H. Wallace (eds.), Economic 
Mobilization and Stabilization (New York: Henry Holt, 1951); Albert G. 
Hart, Defense Without Inflation (New York: The Twentieth Century Fund, 
1951); Albert G. Hart and E. Cary Brown, Financing Defense: Federal Tax 
and Expenditure Policies (New York: The Twentieth Century Fund, 1951); 
Albert G. Hart, Defense and the Dollar: Federal Credit and Monetary 
Policies (New York: Twentieth Century Fund, 1953); Donald H. Wallace, 
Economic Controls and Defense (New York: The Twentieth Century Fund, 
1953); Tibor Scitovsky, et al . , Mobilizing Resources for War (New York: 
McGraw-Hill, 1951). 

c 

Emile Benoit and Kenneth E. Boulding (eds.), Disarmament and the 
Economy (New York: Harper & Row, 1963). 


3 






















ACDA/E-156 


presents major problems for an economy. Even general and complete dis¬ 
armament would post no insuperable problems; indeed, it would mainly 
afford opportunities for a better life for our citizens."^ Later that 
summer a conference in Oslo, Norway was convened to consider economic 
aspects of world disarmament and interdependence and the papers pre¬ 
sented have since been published.7 

The present study differs somewhat from those referred to above 
in its concern with distinguishing the known from the unknown in the 
adjustment process in order to identify profitable areas for further 
investigation. The inclusion of material on the long term structural 
shifts in the American economy which are possibly traceable to the 
secular rise in military spending, and the explicit treatment of the 
organizational and administrative issues influencing the governments 
ability to smoothly shift resources also differentiate it from most 
other treatments of the impact of changes in military spending. 

No study of this subject would be complete without an expression 
of gratitude to the United States Arms Control and Disarmament Agency 
for its active role in the sponsorship of research in this area. Our 
knowledge of the economic impact of military spending and the reduction 
in such spending has grown impressively .during recent years as a 
result of the research program of the Agency. Whether the level of 
concern be with the individual, the coramonity, the area, the industry, 
or the nati.on, the researcher finds the fundamental work frequently 
done under the sponsorship of ACDA. In this, as in all other such 
works, however, it should be emphasized that the views expressed are 
those of the authors and not those of the Agency. 



Report of the Committee on the Economic Impact of Defense an d 
Disarmament (Washington: Government Printing Off-frp 1965), p. 1. 

Emile Benoit (ed.), Disarmament and World Economic Interdependpnrp 
(New York: Columbia University Press, 1967). ---- c -— 


4 














ACDA/E-156 


1.2 FUTURE MILITARY BUDGETS AND THEIR ECONOMIC CONSEQUENCES 
1.2.1 Military Spending in the Next Few Years 

One of the early tasks of the study group was to agree upon the 
size of possible post-Vietnam defense budgets. Questions of the over¬ 
all size of a hypothetical defense budget, its composition, and the 
length of the time period over which the adjustment was seen as 
occurring were all important components. In the absence of official 
government estimates it was necessary to arrive at illustrative 

military budgets which would be plausible in terms of their overall 
magnitudes and in the relationship between their components. 

There was no shortage of alternative military budgets for the post- 
Vietnam period from which to choose. A systematic review of these hypo¬ 
thetical defense budgets was difficult however, since underlying assump¬ 
tions about military and political developments and expected rates of 
price inflation were not always made explicit. Another frequently 
voiced but unquantifiable variable was the attitude of the new President 
toward expected recommendations for additional defense spending from his 
military advisers. Finally, most of the scenarios were structured in 
terms of developments expected at certain specified time periods after 
a cease fire in Vietnam with none foreseeing the particular form of 
withdrawal and replacement now known as "Vietnamization.” Many of these 
projections fell in a range of $61 to $78 billion for FY 1972. 

Typically, these forecasts dealt almost exclusively with the 
expected reduced costs of the Vietnam operation. There was an equally 
bewildering array of positions on the strategic forces. The Preparedness 
Investigating Sub-committee of the Senate Armed Services Committee spoke 
of the need for "prompt decisions... for the deployment of additonal and 
more modern weapon systems and improvements to existing weapon 


A representative group of these projections would include the 
following: Economic Report of the President Transmitted to the Congress 

February, 1968 (Washington: Government Printing Office, 1968), p. 90; 
"Report to the President from the Cabinet Coordinating Committee on 
Economic Planning for the End of Vietnam Hostilities," Economic Report 
of the President Transmitted to the Congress, January, 1969 (Washington: 
Government Printing Office, 1969), pp. 181-211, especially p. 199; 
Gilbert Burck, "How Big a 'Peace Dividend 1 ?", Fortune , Vol. LXXVII, No. 

6 (June 1, 1968), pp. 86-89, 156-157, especially p. 87; Committee for 
Economic Development, The National Economy and the Vietnam War (New 
York: The Committee, April, 1968), p. 44; Chamber of Commerce of the 
United States, After Vietnam (Washington: The Chamber, March, 1968), 
p. 1; George L. Perry, "The Post-Vietnam Budget Outlook," National City 













ACDA/E-156 


systems...” The Committee recommended development of a new long range 
strategic bomber and a speed up in research and development work on an 
advanced ICBM. 


A group of market analysts and planners assembled in 1968 under 
the auspices of the Electronics Industries Association predicted high 
levels of American military spending. They assumed that ''during the 
1970's the nuclear stalemate, Chinese nuclear potential, and the Commu¬ 
nists 1 exploitation of 'wars of national liberation' will require the 
U.S. to maintain an adequate and effective tactical capability while, 
updating the strategic force."10 By way of contrast, Carl Kaysen writ¬ 
ing at the same time advocated a sharply reduced defense budget. 
Assuming a strategic arms freeze he presented a total military budget 
of $50 billion (in 1969 prices) for the unspecified post-Vietnam year 
of 197X based upon a manpower cutback to a total force of about 2.2 
to 2.4 million men, the level prevailing in the last quarter of 
calendar year 1950.^ This position was sharply challenged by a RAND 
Corporation analyst who argued that the analysis failed to incorporate 
"modernization/jijflation" and in fact, required an "implicit free: 
upon all arms.” 


ze 


8 • 

(cont.) Bank of Minneapolis, October 14, 1968, p. 5; Otto 

Eckstein, "Choices Ahead," Remarks delivered to the 10th Annual Fore¬ 
casting Conference of the American Statistical Association, New York 
Chapter, April 26, 1968, p. 4; Otto Eckstein, "The Outlook for the 
Federal Budget Through 1975," Remarks presented at the 11th Annual 
Meeting of the National Association of Business Economists, Chicago, 
Illinois, September 25, 1969, p. 9; and Juan Cameron, "The Case for 
Cutting Defense Spending," Fortune , Vol. LXXX, No. 2 (August 1, 1969), 
pp. 69-73, 160-162; especially p. 70. 

9 


U.S. Congress, 90th Congress, 2nd Session, Senate Committee on 
Armed Services, Preparedness Investigating Subcommittee, Investigation 
of the Preparedness Program: Status of U.S. Strategic Power (Washington: 
Government Printing Office, 1968), pp. 21 and 23. 

Electronics Industries Association, The Post-Vietnam Defense and 
Space Market Environment (Washington: The Association, 1968), Vol. 1, 
p. 4. 

11 Carl Kaysen, "Military Strategy, Military Forces, and Arms 
Control," in Kermit Gordon (ed.), Agenda For The Nation (Washington: 

The Brookings Institution, 1968), pp. 549-584, especially pp. 581-582. 

12 

Malcolm W. Hoag, A New Administration Faces National Security 
Issues: Constraints and Budgetary Options (Santa Monica: The RAND 
Corporation, November, 1968, P-3959), pp. 21-26, especially p. 25. 


6 












ACDA/E-156 


The problem of attempting to project the impact on the military 
budget resulting from an agreement with the Soviet Union limiting 
strategic weapons is highly complex. Despite popular views to the con¬ 
trary, strategic arms limitations might result in a higher rather than 
a lower level of military expenditures for at least two reasons. First, 
while the major goal would be to curb the nuclear arms race this goal 
would have to be consistent with the objectives of preventing accidents, 
errors of interpretation, and in general achieving a strategic weapons 
mix which would be "stabilizing." These goals could conceivably require 
increased expenditures. Second, some analysts point out that a serious 
restriction on strategic weapons could lead to military requests for 
compensatory increases in non-strategic foj^es to prevent a net diminu¬ 
tion in our military strength and posture. 

Equally plausible and no less complex is the counter argument that 
a necessary pre-condition for a serious agreement on the limitation of 
strategic arms would be a climate of mutual trust and friendship of such 
magnitude as to bring about not only an agreement on strategic arms, but 
on the entire level of military forces. If one accepts this reasoning 
the total reduction in military spending which could result from such an 
agreement might be some multiple of the initial reduction in spending 
on strategic weapons rather than simply some fraction of the amount cur¬ 
rently being spent on our strategic forces.^ 

Shortly after taking office President Nixon ordered a detailed 
study of American global military and foreign policy. His conclusions 
on "the state of the world" were made public in a February 1970 report 
in which he announced a shift in contingency planning from 2h simul¬ 
taneous military operations to lh. Under circumstances of redefined 

13 

For an incisive discussion of thd*se problems, see Thomas C. 
Schelling and Morton H. Halperin, Strategy and Arms Control (New York: 
Twentieth Century Fund, 1961), pp. 120-125; also Thomas C. Schelling, 
"Arms Control Will Not Cut Defense Costs," Harvard Business Review , Vol. 
39, No. 2 (March-April, 1961), pp. 6-14, 156-158. The importance of 
stabilized deterrence in disarmament situations is discussed in Thomas 
C. Schelling, "The Role of Deterrence in Total Disarmament," Foreign 
Affairs , Vol. 40, No. 3 (April, 1962), pp. 393-406. 

l4 The cost assigned to the core strategic forces program in the 
military budget was at $8.6 billion in FY 1969 and in the two Nixon Ad¬ 
ministration successor budgets has fallen to $7.5 and $8.0 billion, 
respectively. 

^Richard Nixon, "United States Foreign Policy for the 1970’s: A 
New Strategy for Peace," A Report by the President to the Congress, 
February 18, 1970, pp. 97-98, processed. 


7 







ACDA/E-156 


national strategic interests and commitments appreciable changes in the 
military force structure are conceivable. It thus became necessary to 
select a range of alternative which would reflect as realistically as* 
possible the alternative levels of military budgets which might accom¬ 
pany the changed global posture of the United States. 

Professor William W. Kaufmann was conducting precisely such a study 
at the Brookings Institution and permitted us to utilize his military 
budget estimates for FY 1972. Kaufmann*s alternative post-Vietnam 
defense budgets are reporduced in Table 1 and their underlying assump¬ 
tions appear in Exhibit 1.^ Professors Klein and Cumberland were 
assigned the task of analyzing these figures on military spending with 
their respective models to determine their likely economic impact. 

Their results are summarized below. 


Charles L. Sc'hultze has recently published a careful study of the 
force structures and military budgets which might be envisioned in the 
period to FY 1975. His essay clearly illustrates the myriad of elements 
and assumptions which enter into military budget projection and includes 
a lucid example of the budgetary consequences of alternative force 
structures. See his Setting National Priorities: The 1971 Budget 
(Washington: The Brookings Institution, 1970), pp. 17-54, especially 
p. 28, Table 2-5. 

^The Kaufmann defense budgets are presented in terms of estimated 
1972 dollars. The defense budget is estimated to have experienced a 
20 percent inflation between fiscal years 1965 and 1972, reflecting 
general inflation in the economy and appreciable pay increases awarded 
to Federal military and civilian personnel as part of the program to 
align Federal employee compensation more closely to the levels of the 
private sector. Such calculations are inherently imprecise given the 
rapidity with which military programs and procurements change. 


8 





Sample Post-Vietnam Defense Budgets 
(1972 Prices - billions of dollars) 


ACDA/E-156 



CO 

w 

vO 

O 

CO 

o 

00 

CJ /-V 

• 

• 

• 

• 

• 

C*S LO 

rH 

CM 

CN 

CN 

CN 

o ^ 

Pn 

</> 






cd 


W 

CO 

$5 


CJ 

O 


£ 

1—1 


w 

H 


O 

C 


M Q 

CJ 

y--\ 

.-1 JZ 

M 

CO 

hJ <2 

£ 

v — ' 

W 



M 

o 



CJ 



oo 

o 


on 


• 

• 

• 

• 

• 

CN 

</> 

m 

uo 

m 

o 

rH 


,_3 

Cx3 

CO 








CO 

w 


o 

o 


VO 


Ph 

o 

u 


• 

• 

• 

• 

• 

pj 

pH 

pc; 

CN 

in 

ON 

CN 

rH 

vD 


2 

o 

V-/ 

t—i 

rH 

CN 

CN 

CN 

w 


Ph 







o 

p-i 









cj 

M 

o 

w 

H 

2 

H 

CO 


CO 

w 

CJ /—s 
P^ rH 
O ^ 
PH 


CO 

00 

CN 

vO 

vO 

• 

• 

• 

• 

• 


r^. 

00 

o 





rH 

rH 


</> 



CN 

<t 

ON 

m 

vO 

c 

• 

• 

• 

• 

• 

o 

CN 

ON 

c-- 

o 

CO 

H 

-<r 

</> 

UO 

vO 


ON 


H 


0) 

XJ 





i 


W 


o 

(1) 





0 

to 

O 


e 

c 

<D 


X) 

(U 

CO 

4-1 

Q 


a) 

•H 

a 


(1) 

G 


*H 

!Z> 

6 

H 

rH 

*H 

•n 

4-1 

H -H 

u 


PQ 

3 

U 

0 

rH 

VO 

cd 

Cd «H 

cd 

O 


e 

<u 

cd 

Q> 

ON 

rH 

£ CD 

S 

•H 

Pn 

•H 

-M 

<1) 

CO 

iH 

4-j 

4-» CO 

4-> 

U 

O 

c 

0) 

J-i 

cd 


C 

co cd 

CO 

0) 


•H 

o 

4-1 

PQ 

>4 

M 

O PQ 

O 

a 

W 

£ 


CO 




PH 

(X, 


C 

• 


• 


• 


• 

• 


H 

rH 


CN 


CO 


<r 

m 



9 



ACDA/E-156 


'O 

CU 

3 

a 


a 

o 

o 


w 

PI 

PQ 

<J 

H 



5 

O 

PM 

PM 

CP 

C/3 


pc; 

w CO 

33 23 


H 

O 

Pm 

O 


O o| 

M 
H 
C 
25 


a 

<S 


53 

o 

M 

Si o 

H O 
CO CO 
M CO 

2 C 
M 

S Q 


CO 

w 


M ON 


H 

O 

<J 


H 




H 

Pd 

O 


CQ 







CO 

1 

CM 

CM 

CM 

CM 

CM 

*—1 

£ 

• 

• 

• 

• 

• 

ON 

p 

cry 

NO 

nO 

vO 

nO 

CO 

<u 

> •’ 
o e 


CM 


cry 


CNl 


00 

o 

cry 


CM 


00 

CO 

-CO- 


00 

0 

<r 


m 


m 


ON 

CM 

cry 


CM 

m 


r^. 

m 


oo 



cu 

C3 

P -H 
Cd rH 
£ 0) 
P CO 
CO cd 
O CQ 
PM 


CM 


o 

25 

3 

• 

NO 

00 

o 

NO 

o 

M 

CJ 

<J /-N 

• 

• 

• 

• 

• 

23 

M 

H 00 

<r 

m 


vO 

00 

M 

Q 

W ^ 

cry 






CO O 

<u 

P P3 
00 *H 

a 


o 

cj 


6 
o 

C3 
O 
O 
CP Pd 


CO 


: P3 

~ o 
co 

P (0 

cu cu 
00 p 
- a p 

3 -H 
PQ g 

a) o 
co a 
a ho 
cu 3 
ip co 

0) 

Q - 

cu 

0 0) 
cd p 
C P 
P *H 
0) 0 
•H g 

> O 

I o 

p 

CD O 
O *H 
PM 0 
O 

CU C 

> O 

o 


o 

p 

00 

P3 

•H 

43 

CO • 
cd ON 
P2 r- 

^ rH 
I 

00 

p 
P 
cd 
PM 


CO 

0) 

•H 

P 

•H 

P 

o 

•H 

P 

PM 


0 

O 

C 

O 

O 

Pd 


cd 

£ 

O 

•H 

P 

cd 

55 


CM 


cn 


• 

P Pd 


ON 

Cl 

NO 

cd 

T3 

rH 

o 


c p 

C 


•H 


P P3 

cd 


P 


CU -H 


CU 

CM 


P o 

p 

CJ 

a 


H ►n 

cu 

♦H 

3 



0( 

ip 

co 



'd 

<P 

CO 


CJ 

CJ 

O 

cd 


- o 

PQ 




CJ *h 


00 

cu 


cj co 

Pn 

CJ 

43 


cd CD 

p 

*H 

p 

00 

0 cu 

cd 

P 


• 

Ip C/3 

p 

CJ 

p 

o 

d 

•r 

•H 

o 

rH 

cd p 

r— 

P 

ip 


Pm co 

*r 

Pm 



rH 

5EJ 


CM 


• 


P 

iH 


*> 

cu 

CJ 



CO 

43 

CU 

TJ 


0 CO 

H 

g 

CJ 


cd cu 


3 

cd 

1 

•H p 

r P 


3 >N 

rH 00 

P 

CU 

rH 

C/3 P 

rH CJ 

CJ 

> 

rH 


*H O 

<u 

o 


P P 

^ U 

0 

o 

CO 

cd o 



cu 

S *H 




00 

P P 

• • 



cd 

CO cu 

Pd 



CM 

O CM 

CM 




(U 


5 



cu 

• 

o 



CO 

m 

C/3 



cd 


PM 

CM 


Cd 

H 

CJ 

cu 

cm 

CO 

<u 


oo 

H 

I 

cn 

vO 


CM 

CM 


ON 

NO 


cu 

00 

"d 

3 

rQ 

X 

o 

cd 

cu 

oo 

ci 


p 

<u 

T3 

CJ 

3 

CO 


43 


10 


T0A stands for Total Obligational Authority. 









ACDA/E-156 


EXHIBIT 1 

Assumptions Governing the Sample Defense Budgets Developed 

by Professor William W. Kaufmann 


1. Minimum Deterrence [[hereinafter referred to as Budget A ($42.2 

billion)] - 

a. Strategic nuclear deterrence is based solely on the Polaris- 
Poseidon force; Minuteman, bombers, and CONUS active defenses 
are phased out; 

b. Theater nuclear forces are phased out of the inventory; 

c. 6 division forces and 6 tactical air wings are dropped from 
the force structure, and General Purpose force planning is 
based on the assumption of the capability simultaneously to 
cope with one major and one minor contingency; 

d. Proportionate reduction in other programs associated with the 
General Purpose Forces (categories 4, 5, 7, 8, and 9), and a 
cut in military assistance; 

e. A reduction in the pay raise to reflect the reduction in man¬ 
power ; 

f. The armed forces are assumed to number 2.3 million. 

2. Streamlined Baseline [[hereinafter referred to as Budget B ($59.4 

billion)] - This budget is intended to reflect the following 

characteristics: 

a. deferral of the decision to deploy Safeguard and Minuteman III, 
and phaseout of older-model B-52’s; 

b. cessation of further expenditures on theater nuclear forces; 

c. potential for modernization of the forces to the extent that 
older programs are traded off against needed new ones, and 
through salvage of high-value Vietnam surpluses; 

d. The armed forces are assumed to number 2.5 million. 

3. FY 1965 Inflated [[hereinafter referred to as Budget C ($67.6 bil¬ 

lion)] - This is the original FY 1965 defense budget with the 

following changes: 

a. The first ten categories are inflated by 20 percent; 

b. Retirement pay and a pay raise are added; 

c. The armed forces are assumed to number 2.7 million. 


11 




ACDA/E-156 


EXHIBIT 1 (continued) 


4. Postwar Baseline ^hereinafter referred to as Budget D ($70.5 bil¬ 

lion)] - This budget reflects not only the end of the war in 
Vietnam, but also a reduction in the General Purpose Forces to 
the level of about FY 1965. However, the strategic and affili¬ 
ated programs are maintained near the levels of the FY 1970 
budget. The armed forces are assumed to number 2.7 million. 

5. Postwar Superiority ^hereinafter referred to as Budget E ($93.6 

billion)] - This budget has been arrived at by taking the fol¬ 
lowing steps: 

a. Adding $6 billion to the Strategic Forces in order to start 
procuring 700 Improved Capability Missiles, 210 AMSA, AWACS 
and the F-106X, a heavy ABM defense, and an expanded fall¬ 
out shelter program; 

b. Expanding Research and Development and Intelligence and Com¬ 
munications proportionately; 

c. Reducing the budget by $16.7 billion to account for the end 
of the war in Vietnam; 

d. The armed forces are assumed to number 3.5 million. 


12 









ACDA/E-156 


1.3 REVIEW OF FINDINGS 

The more important findings of the study will be summarized in 
this section by reference to the contributions of the various partici¬ 
pating authors. Important national economic variables (GNP, Unemploy¬ 
ment Rates, and the Balance of Payments) will be reviewed first. 
Attention will then be shifted to the region, state and SMSA level 
followed by an analysis of the impact upon individuals, firms and 
governments. 


1.3.1 Impact on Gross National Product and Unemployment 

Tables 2 and 3 contain the projectecLFY 1972 GNP and unemployment 
rates generated by the Klein and Maryland 1 models for five defense 
budgets [[Budget A ($42.2 billion)], [Budget B ($59.4 billion)], 

[[Budget C ($67.6 billion)], [[Budget D ($70.5 billion)], and [[Budget E 
($93.6 billion)]. They are all shown on both a compensated 1 ^ and un¬ 
compensated basis with the exception of the Maryland version of Budget 
D which was used as a "normalcy" base and is available only in the 
uncompensated form. In addition, Professor Klein’s results (Table 2) 
include two alternative compensated versions of the lowest defense 
budget. Budget A. The compensation package identified as Compensated 
II was specifically developed to determine what policies would be re¬ 
quired to bring the unemployment rate down to approximately 4 percent 
under the stringent conditions of Budget A. The details appear in the 
Klein chapter. 

Both sets of results suggest that in the absence of compensatory 
government action, lower military spending is likely to be accompanied 
by higher unemployment rates. Such findings are, of course, not 
surprising since the uncompensated versions assume no action to main¬ 
tain the level of effective demand. When the much more realistic com¬ 
pensated versions are run through the models, the unemployment rates 


18 

The Maryland model is that developed by Professor Clopper Almon 
of the University of Maryland. 

19 The term "compensated" is used here to refer to explicit 
Federal government action to maintain the level of aggregate demand in 
the U.S. economy through increased government expenditures or tax 
actions (reductions) designed to bring about increased consumer expen¬ 
diture and/or business investment spending. The Klein and Maryland 
models use different compensation packages which are described in the 
chapters by Professors Klein and Cumberland. 


13 




Klein (Wharton) Projections of Unemployment Rates and GNP 
Under Five Alternative Defense Budgets, Fiscal Year 1972 a 


ACDA/E-156 



• 





P 

• 


• 


a 


o 

<* 


o 

m 

00 


PQ 

o 


o 





rH 


EH 





W 





O 





Q 

• 



GD 

p 



r-- 

PQ 

a 

• 


• 


o 

CTN 

CM 

in 


o 

uo 

vO 



G 


O 



G> 

<j> 

rH 



P 

B 

o 

o 

G 




CM 

CM 

<r 


<j> 


oo 

vo 


o 


w 

H 

W 

O 

Q 

G> 

PQ 


Pi 

a 

o 

cj 


Of 

a 

o 

o 

G 


P 

a 

o 

o 


H 

W 

O 



M 





P 

• 



M 

CM 


o 

PQ 

a 

o 

<j\ 



• 


• 


O 




• 

CM 

m 



O 


O 


P 


o 



G 


rH 


a 


rH 



G> 

<o- 



o 


rH 







o 

<J> 







< 




S'? 






M 

CM 


<r 



vO 


H 


• 


• 


• 

• 


PQ 

• 

CM 

rH 

m 


•P 

1 ^ 

CO 

O 

p 





a 


00 

Q 

a 


o 



o 


o 

PD 

o 


rH 


QJ 

CJ 


rH 

PQ 

u 

</> 





<jy 







H 









U 









O 





PQ 


P 

a 

o 

o 

G 

G5 


CO 

CT» 


•CO- 


• 

CO 

On 


•CO- 


tO 

o 


co¬ 


in 


vO 

r-- 

co 


</> 


o 

o 


m 

oo 

o 


m 

r^. 

o 


m 

co 


CM 

CO 


5^2 

m 


ON 

<r 


&>$ 

vO 


r—I 

m 



P 



P 



O 



o 


co 

3 


CO 

3 


a) 

'3 


( 1 ) 

T) 


P 

O 


p 

O 


3 

P 

<u 

3 

P 

0 ) 

P 

P 

p 

P 

P 

P 

•H 


CO 

*H 


cO 


rH 

P 

T 3 

rH 

P 

G 

CO 


G 

CO 


< 1 ) 

G 

p 

( 1 ) 

G 

P 

P 

o 

G 

P 

o 

G 

X 

•H 

O 

X 

•H 

0 ) 

w 

P 

a 

w 

p 

a 


CO 

so 


CO 

to 

a) 

Z 

o 

0 ) 

Z 

o 

CO 


rH 

co 


rH 

G 

(0 

P 

G 

CO 

P 

<D 

CO 

a 

CD 

CO 

a 

M-t 

o 

Q) 

Ip 

o 

<u 

0 ) 

p 

c 

0 ) 

p 

G 

Q 

O 

G> 

Q 

o 

GD 


14 


GNP and Defense Expenditures in billions of 1972 dollars and Unemployment Rates in percent 









University of Maryland Projections of Unemployment Rates 
and GNP Under Five Alternative Defense Budgets, Fiscal Year 1972 


ACDA/E-156 


cd 






&^S 


• 

nO 




a 

• 


• 


b 

r^» 

o\ 

CO 


o 

NO 

on 


o 

u 


o 





rH 


H 


</> 



W 





O 





Q 

• 

\o 


ON 

CD 

a 

• 


• 

PQ 

B 


nO 

CO 


Q 

nO 

ON 



o 


o 



G 


iH 



CD 





PQ 

H 

W 

O 

O 

G> 

PQ 


H 

W 

O 

Q 

to 

PQ 


CM 

6 

o 

o 


ON 


</> 


o 

o 


CO 







«■) 

• 

NO 


7% 

• 

•<r 


00 


• 

• 


• 

C1 

• 


• 


D- 

CO 


CO 

S 

ON 

nO 



3 

ON 

ON 


o 

m 

00 



o 


o 


u 


o 


W 

CJ 


rH 


G 


f—1 




</> 



CD 

<j> 



H 









W 









O 









Q 

• 

nO 


rH 






CL 

• 


• 





PQ 

e 

CO 

NO 

rH 






o 

ON 

CM 







u 


rH 


• 

CM 


r^- 


G 


«H 


Cl 

• 


• 



•co¬ 



6 

CM 

ON 

co 






o 


ON 







u 


o 









rH 








</> 












Q 




6-2 

• 

CM 




• 

in 


r^. 

a 

• 


• 

H 

CL 

• 


• 

B 

CM 

nO 

vO 

W 

B 

o 

ON 

co 

o 

<* 

NO 


O 

o 


ON 


o 


O 


Q 

CJ 


o 


G 


rH 


CD 



rH 


CD 

•CO¬ 



PQ 


•co¬ 





4J 





■H 




O 





CJ 



CO 

G 




co 

G 



<D 

X) 




a) 

x> 



J-t 

o 




>-• 

o 



G 

u 

a> 



G 

u 

(U 


■u> 

Oh 

4-1 



4J 

0-4 

4-4 


•H 


<9 



•H 


cd 


XJ 

i—1 

05 



X? 

rH 

05 


G 

cd 




G 

cd 



<D 

G 

4-4 



0) 

G 

4-4 


Pu 

O 

G 



CL, 

o 

G 


X 

•H 

0) 



X 

•H 

<U 


W 

U 

6 



W 

4-4 

e 



cd 

>> 




cd 

tO 


Q) 

£5 

O 



a) 

£5 

o 


CO 


rH 



CO 


i—4 


G 

CO 

Cl 



G 

CO 

(X 


<U 

CO 

e 



a) 

CO 

e 


4-4 

o 

<U 



4-4 

o 

a) 


<D 

u 

G 



Q> 


G 


P) 

o 

CD 



Q 

o 

GD 


cd 


15 


GNP and Defense Expenditures in billions of 1972 dollars and Unemployment Rates in percent 




ACDA/E-156 


uniformly decline. This point deserves emphasis as it demonstrates 
that there is nothing unique about the capacity of military spending to 
generate jobs. Tax cuts and monetary ease to encourage private spend¬ 
ing or government expenditures on civilian programs are also equipped 
to do the job. 

Both models show GNP in excess of $1 trillion and unemployment 
rates which, even under the most challenging assumptions (an uncompen¬ 
sated cut in military expenditures to $42.2 billion) do not rise above 
6.8 percent. This was the average national unemployment rate in 1958, 
and is close to the 1961 level of 6.7 percent. While both of these 
were years of recession, they are not considered to have been years of 
national crisis. These findings suggest that the U.S. economy could 
adjust to cuts in defense expenditures far greater than those expected, 
even in the absence of offsetting expenditure increases with unemploy¬ 
ment rates during the transition period which could generally be 
considered tolerable. The likely application of monetary, fiscal and 
other compenstory policies could be expected to reduce these unemploy¬ 
ment rates even further. For purposes of perspective. Table 4 presents 
monthly unemployment rates for the period since 1948. 

Extended discussions of characteristics of the models and 
methodologies used appear in the Klein and Cumberland chapters. How¬ 
ever, it should be noted here that the two models are independent and 
different in design from one another. In addition, the Klein results 
which appear in Table 2 were generated in the fall of 1970 and hence 
reflect more recent developments than does the Maryland model which was 
run in the summer of 1970, using somewhat earlier data. Therefore, the 
reader should be cautioned against the risks of a direct comparison of 
the two sets of results. 

This might also be an appropriate point to note the difference 
between prediction (or projection) and forecasting.20 Prediction may 
be viewed as a "conditional statement of what will happen, assuming 
the validity of a relevant set of scientific laws and given observa¬ 
tions which define the initial or exogeneous conditions under which 
these laws are expected to operate in a given instance. A ceteris 


There is a risk of semantic confusion in these terms. Some 
would distinguish between "prediction" and "projection" and reserve 
the latter term to indicate the conditional form. Regardless of 
terminology, the crucial difference resides in the presence or absence 
of the conditional statement. 


16 











Unemployment Rate - All Civilian Workers 
(Seasonally Adjusted) 


ACDA/E-156 


0£ 

> 

00 

• 

ON 

CO 

CO 

o 

4 

CO 

vO 

M3 

rH 

CO 

CO 

uo 

uo 

n- 

UN 

3m. 

CM 

m 

00 

<J 

CO 

uo 

m 

CO 

CO 

CM 

UO 

m3 

<3 

<3- 

VO 

m 

uo 

vO 

UN 

uo 

UO 

M3 

CO 

• 

U 

<D 

o 

ft 

vO 

CO 

rH 

3m 

U0 

o 

CM 

CM 

CM 

CM 

CO 

vO 

O 

UN 

m 

O 

o 

00 

Q 

m3 

VO 

m3 

CO 

CM 

m3 

U0 

m3 

<3 

U0 

vO 

m 

v£> 

vO 

in 

uo 

uo 

m3 

ft 

CO 

• 

> 

O 

00 

ft 

m3 

CM 

m 

00 

m 

CO 

CM 

CO 

rH 

CM 

00 

CM 

rH 

n. 

jm. 

CO 

rH 

vO 


CO 

vO 

m3 

CO 

CM 

co 

U0 

M3 

<3 

UO 

vO 

in 

vO 

vO 

uo 

uo 

m3 

m3 

CO 

• 

u 

o 

jm. 

• 

On 

CM 

m 

O 

rH 

n* 

CO 

ON 

UO 

3m 

3m 

rH 

uo 

m3 

uo 

rH 

CO 

3m. 

o 

CO 

3m 

m3 

CO 

CO 

co 

m 


CO 

m3 

vO 

uo 

vO 

vO 

UN 

uo 

UO 

m3 

CO 

• 

4J 




















o. 

a) 

oo 

ft 

vO 

m3 

CO 

rH 

ON 

rH 

rH 

ON 

M3 

rH 

in 

uo 

n- 

vO 

m 

rH 

CO 

n- 

co 

CO 

vO 

<3- 

co 

CO 

CM 

vO 

<3- 

CO 

m3 

3m 

uo 

uo 

VO 

m 

UO 

U0 

m3 

co 

oc 

3 

ON 

ft 

00 

n 

rH 

>3- 

im. 

O 

CM 

rH 

rH 

m3 

CM 

vO 

vO 


m3 

o 

m3 

co 

<J 

CO 

vO 

m3 

CO 

CO 

CM 

vO 

<3 

<3 

M3 

3m 

uo 

uo 

v£) 

uo 

uo 

uo 

m3 

co 





















rH 

3 

vO 

ft 

im. 

o 

rH 

CM 

vO 

00 

O 

<3 

CM 

uo 

rH 

UO 

O 

m3 

VO 

ON 

m3 

00 


CO 

vO 

m 

CO 

CO 

CM 

U0 

<3 

<3 

M3 

3"- 

U0 

m 

rs 

uo 

U0 

M3 

M3 

co 

0) 




















C 

3 

VO 

ft 

CM 

m3 

CSI 

o 

m 

vO 

CM 

CO 

CO 

CO 

o 

M3 

ON 

uo 

VO 

CM 

vO 

00 

►"> 

CO 

VO 

in 

CO 

CO 

CM 

U0 

<3 

<3 

M3 

3m 

uo 

UO 

vO 

UN 

uo 

UO 

m3 

CO 

nt 

m 

rH 

uo 

o 

o 

uo 

ON 

CO 

CO 

rH 

M3 

rH 

rH 

rH 

uo 

ON 

rH 

vO 

ON 


CO 

VO 

m 

CO 

co 

CM 

U0 

<3 

<3 

M3 

3m 

uo 

uo 


UN 

UO 

UO 

M3 

CO 

• 

on 

CO 

oo 

rH 

CO 

3m 

ON 

3m 

O 

ON 

M3 

CM 

CM 

o 

vO 

3m 

CO 

CO 

00 

a 

• 



















<5 

CO 

m 

m 

CO 

CM 

CM 

uo 

M3 

<3 

CO 


uo 

U0 

3m. 

UO 

uo 

UO 

m3 

CO 

Mar. 

o 

o 

CO 

M3 

CO 

VO 

o- 

vO 

CM 

3m 


vO 

m3 

ON 

vO 


<3 

3m 

00 

M3 

uo 

vO 

CO 

CM 

CM 

in 

m3 

<3 

CO 

vO 

U0 

UN 

vO 

uo 

uo 

uo 

M3 

co 

JQ 

00 

r-* 

<r 

m3 

rH 

vO 

CM 

n* 

CO 

ON 

m3 

ON 

00 

ON 

U0 

ON 

m3 

O 

3m 

<D 



















CO 

m3 

vO 

CO 

CO 

CM 

m 

<3 

CO 

CO 

vO 

U0 

m3 

vO 

U0 

UO 

UO 

U0 

CO 

♦ 

C 

*<1- 

CO 

m 

3m 

CM 

CO 

On 

CO 

o 

CM 

co 

o 

CM 

vO 

oo 


vO 

co 

ON 

to 


















—) 

CO 

-3- 

vO 

co 

CO 

CM 

m3 

<3 

m3 

M3 

uo 

vO 

uo 

vO 

UN 

uo 

UO 

m3 

CO 


00 

On 

o 

rH 

CM 

CO 


UO 

vO 

3m 

00 

ON 

o 

rH 

CM 

co 

M3 

uo 

VD 


m3 

<r 

UO 

UO 

m 

U0 

uo 

U0 

UO 

m 

UO 

m 

vO 

vO 

vO 

vO 

vO 

vO 

vO 


on 

CO 

O' 

CO 

co 

CO 

CO 

ON 

CO 

ON 

ON 

ON 

ON 

ON 

ON 

On 

ON 

ON 

ON 


rH 

rH 

rH 

rH 

rH 

tH 

?H 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

.H 

rH 

rH 

rH 


17 


















TABLE 4 (continued) 


ACDA/E-156 



00 

vO 

m 


> 

• 

• 

• 


< 

on 

CO 

CO 


• 





o 

r- 

CO 

m 


G 

• 

• 

• 


Q 

CO 

CO 

CO 


• 





> 

00 


m 

00 

O 

• 

• 

• 

• 

2 

CO 

CO 

CO 

m 

• 





G 

CSJ 

X> 

00 

vO 

O 

• 

• 

• 

• 

o 


CO 

CO 

m 


ex 

O 

X> 

00 

•n 

G 

• 

• 

• 

• 

CO 

<r 

CO 

CO 

m 

• 





w 

00 

m 

m 

iH 

G 

• 

• 

• 

• 

< 

CO 

CO 

CO 

m 






r—1 

a> 

I-". 

m 

o 

G 

• 

• 

• 

• 

*-> 

CO 

CO 

CO 

m 

G 





G 

ON 

1^. 

<1- 

n* 

G 

• 

• 

• 

• 


CO 

CO 

CO 

<fr 


o\ 

X) 

in 

o 

G 

• 

• 

• 

• 

2 

CO 

CO 

CO 

in 

• 

G 

oo 

m 

m 

00 

a 

• 

• 

• 

• 

< 

CO 

CO 

CO 

<* 

• 

G 


1— 

<!- 

<r 

G 

• 

• 

• 

• 

2 

CO 

CO 

CO 

<r 

• 

x» 

n* 


CO 

CM 

G 

• 

• 

• 

• 

fX 

CO 

CO 

CO 


• 





G 


vO 

CO 

on 

G 

• 

• 

• 

• 

*-> 

CO 

CO 

CO 

CO 



00 

ON 

o 


vO 

x> 

X> 

r^. 


on 

ON 

ON 

ON 


rH 

rH 

*H 

rH 


T3 

G 

G 

co 

oq 


G 

g 

G 

W 

X) 

G 

G 

G 

§ 

& 


CM 

0 

W 


"G 

G 

G 

m 

m 


cu 


CJN 

vO 

on 


G 
G 
G 
G 
X> 

•» d) 
CO pL| 

o ^ 


G 00 
CO 

*H • 
G O 
G 52 
G 

CO •* 

m 

G pH 

o 

X> • 
G 
X) 

IG 

o 

G 
G 
0) 

G fX 
G 

PQ G 
O 

* rQ 

G G 
O rH 
XI 

G CD 
rH X 
G 
4-( 

O 


O 

> 


G 

o 

G 

O 


G 

O 

G 

G 

O 

CM 

G 


G 

G 
G 
S 

G 

G _ 

G PG 
CU 

G >, G 
G 
O 
G 


cn c 
• o 
& 2 


co 

G 

G 

CO 

CO 

*H 

G 

G 

G 

G 


TJ 


G 

CO 


W 

U 

G> 

O 

CO 






18 





ACDA/E-156 


paribus Mother things being equal] clause is always an implicit part 
of the prediction. n In contrast, forecasts are essentially uncon¬ 
ditional and issue at best only in part from a set of specified laws.^ 2 
The models which have been used by Professors Klein and Cumberland are 
carefully based upon certain assumed interrelationships among many 
economic variables. They should be interpreted as ’’logically possible 
pathways to hypothetical futures.” 23 

In any event, it would be a gross distortion to view the con¬ 
ditional predictions contained in the Klein and Cumberland chapters as 
attempts at pinpoint accuracy in predicting, say, a particular unem¬ 
ployment rate at a particular point in time. Rather they are attenpts 
to determine the nature and o;:der of magnitude of the adjustment 
problems which the nation and various of its regions are likely to 
encounter under certain assumed military budgets of varying size and 
composition. 


1.3.2 Impact on the Balance of Payments 

Professor Benoit concludes that the consequences of peace in 
Vietnam for the Balance of Payments will be more important than those 
likely to follow some form of strategic arms limitation. His estimate 
of the peak Vietnam impact on the U.S. Balance of Payments is approxi¬ 
mately $5.3 billion. He cautions however that the internal linking of 
payment flows in the Balance of Payments makes it unlikely that other 
major flows would in fact have remained unaffected if one main flow 
had been different from what it actually was. However, $5.3 billion is 
likely to be a maximum impact. The Balance of Payments implications 
of a Vietnam withdrawal are unlikely to be symmetrical with those of 
the buildup phase. The reason is that deterioration of the Balance 
of Payments which has been attributed to the war is not necessarily 
eliminable by ending the war. This is because defense prices move up 
with a ratchet-like character, going up far more readily than down; 
and even if U.S. forces are completely withdrawn from Indochina, other 
American commitments in the Pacific area will remain. Also U.S. 
forces are likely to stay in Europe for some time. 


21 0tis Dudley Duncan, ’’Social Forecasting: The State of the 
Art.” The Public Interest , No. 17 (Fall, 1969), pp. 88-118, especially 
pp. 107-108. 

22 Ibid. , p. 108. 

23 Ibid., p. 115. 








ACDA/E-156 


The timing of such defense cutbacks as occur in Asia will be as 
important as their magnitude for Balance of Payments impact. If the 
process is sufficiently slow it could be more than offset by some of 
the rising trends in price levels. Another consideration is the pos¬ 
sibility that Vietnam cutbacks may be partly offset by rising foreign 
aid requirements. Of course, the harmful effects of such a program on 
the Balance of Payments could be somewhat mitigated by tying the aid to 
purchases in the United States. Finally, of critical importance in 
evaluating the impact of new defense programs on the Balance of Pay¬ 
ments will be the nature of these new programs and how closely they 
resemble those that were experienced during the Vietnam conflict. For 
example, while domestic defense procurement cuts into our export 
potential to some extent, it is cheaper in terms of the Balance of 
Payments than maintaining U.S. troops abroad. Even if large military 
expenditures occur primarily at home but contribute to continued 
inflationary pressures, this will worsen our export balance. 

The single most important conclusion is that Balance of Payments 
constraints on domestic adjustment policy will be greatly weakened by 
the end of the war. 


1.3.3 Impact on Regions, States, and Metropolitan Areas 


The regional disaggregation follows the procedures of Professor 
Curtis C. Harris, Jr. of the University of Maryland. The details of 
the methodology appear in Professor Cumberland's paper. 

For reasons of both budget constraints and display space limita¬ 
tions, only three of the five Kaufmann alternative defense budget 
assumptions for 1972 were applied to the regions. The Budget A ($42.2 
billion) and Budget D ($70.5 billion) assumptions were dropped for 
purposes of regional analysis. However, the uncompensated and compen¬ 
sated versions of each of the three remaining budget assumptions were 
included in both state and SMSA tables. 


States experiencing a seven percent unemployment rate or more 
under the uncompensated versions of the defense budget numbered three 
in the Budget B ($59.4 billion) assumption, three in the Budget C 
($67.6 billion) assumption and two in Budget E ($93.6 billion). If 
the cutoff is dropped from seven to five percent unemployment, the 
number of states grows to 18, 13 and three respectively. When compen 
satory programs are added to the model, the numbers with 5% or more 
decline to 11 for Budget B and 10 for Budget C. The Budget E is so 


20 




ACDA/E-156 


large that compensations really mean anti-inflationary policy, hence 
the number of states expected to show unemployment in excess of five 
percent rises from three to thirteen when compensation is included. 

In all cases, however, the states which appear most often with rela¬ 
tively high unemployment rates are Alaska, New Mexico, Nevada, Wyoming 
and Hawaii. 

According to the projections of the Harris model, only seven of 
the 219 SMSA’s show levels of unemployment in excess of 10 percent of 
the labor force. The top five with unemployment usually are Lawton, 
Oklahoma; Fayetteville, North Carolina; Salinas-Monterey, California; 
Duluth-Superior, Minnesota-Wisconsin; and San Diego, California. In 
the absence of compensations under the lowest defense budget, Budget 
B ($59.4 billion), Brockton, Massachusetts and Johnstown, Pennsylvania 
also register over 10 percent unemployment. By way of balance, however, 
it should be pointed out that there are a number of SMSA’s that will 
quite likely experience labor shortages, even in the presence of re¬ 
duced military budgets. Among these are Flint, Ann Arbor, Saginaw, and 
Lansing, Michigan; Jersey City, New Jersey; Erie, Pennsylvania; and 
New Haven-Waterbury-Meriden, Connecticut. These estimates suggest 
that the severity of the impact of defense cutbacks will probably vary 
widely between the various metropolitan areas of the nation depending 
on their industrial mix and other factors. Even within individual 
states the unemployment rates vary widely between metropolitan areas. 
While special assistance may be needed for some areas with especially 
serious unemployment problems, it is likely that most of the nation’s 
SMSA’s could adapt to lower levels of defense expenditures with 
relative ec.se and that many of them would actually experience labor 
shortages. > 

Professor Cumberland’s paper also includes estimates of employ¬ 
ment in twenty major industry groups for each state under each of the 
three defense budget assumptions. 

The foregoing analysis of regional impact was based upon the 
interindustry models of Professors Almon and Harris of the University 
of Maryland. - In recent years some work has been done on applying 
econometric models similar to the Wharton model of Professor Klein to 
subnational regions. Dr. Robert Crow of Mathematics, Inc. has experi¬ 
mented with this type of analysis in the Northeastern Corridor region 
of the United States and his findings appear as a portion of this 
report. Dr. Crow’s work was done some time before the completion of 
the total report and as a consequence, includes assumptions about the 
timing of the cessation of hostilities in Vietnam and of the expira¬ 
tion of the surtax which have proven to be incorrect. Resource and 


21 


ACDA/E-156 


time limitations prevented him from updating his study but in view of 
the uniqueness of his approach and its usefulness as an example of a 
state-of-the-art application, it has been included in this report. 

1.3.4 Military Base Closings 

One particular aspect of regional impact which has been a common 
subject of concern during the last decade is that dealing with military 
base closings. Professor Daicoff has participated in several ACDA- 
sponsored studies of this topic and prepared a general synthesis for 
this project. When a defense facility represents a large part of an 
area’s economy, its reduction or closure may cause an appreciable 
impact. In the great majority of cases, however, the transition is 
smoother than anticipated and communities often find themselves better 
off with a more diversified and civilian-oriented set of replacement 
employers. Some communities have benefited from inheriting useful 
pieces of social overhead capital such as airfields. 

Of particular importance in explaining these findings of limited 
impact are the consumption spending habits of servicemen as between 
post exchange or base commissary and community. The extent of on-base 
housing is also a factor. Finally, the fact that the jobs that disap¬ 
pear often had been filled with dependents of servicemen means that 
the labor force often shrinks with the job openings leaving fewer 
persons unemployed than might otherwise be the case. The DOD Office 
of Economic Adjustment has developed an expertise which is available 
to communities facing the base closing experience. In addition, the 
Homeowners Assistance Program is designed to provide aid in one of 
the more troublesome aspects of the process—protection of the home- 
owner’s equity in the case of transfer. 

1.3.3 Impact on Individuals 

Professors Eaton and Daicoff have examined the transition pro¬ 
blems of those individuals directly employed by primary defense 
producers and by the military. 

Professor Eaton analyzed studies of six major contract termina¬ 
tions or cancellations. These involved the cancellation of the Dyna- 
Soar project with Boeing in December, 1963 at the Seattle facility; 
the completion of work on the Titan Missile by the Martin Company in 
Denver in 1964; the cessation of F-105 aircraft production at Repub¬ 
lic’s Long Island plant in 1964-1964; the Falcon missile termination 
at Hughes Aircraft in Tucson in 1963-1964; and in the San Francisco 
Bay area in March of 1965. 


22 







ACDA/E-156 


One of the important conclusions is that while such layoffs can 
appear as only small ripples in a large community, they can cause 
severe personal hardship for the individuals concerned. Wh^le most of 
the studies agreed that such personal and job-related characteristics 
as age, sex, education and sk:.ll level were important in the reemploy¬ 
ment experience, statistically they were able to explain only a small 
part of the variation between individuals in the reemployment experi¬ 
ence. The findings indicate that a synthesis of personal characteris¬ 
tics and labor market variables such as size, structure and tightness 
predicts the reemployment experience more successfully. 

Engineers had a less severe reemployment experience than did 
social science and business degree holders. A larger proportion of 
non-engineers than engineers made a shift to non-defense work. 

Engineers who did transfer to non-defense work had no more severe a 
reemployment experience than did non-engineers in similar transfers. 

While the majority of defense occupations surveyed had counterparts 
for which the employment outlook was good, geographic or industrial 
change was often required. When once again employed, most of the 
displaced workers experienced a decline in salary. 

Drawing upon cases observed during the last decade Professor Daicoff 
has reviewed the adjustment process of DOD civilian and military person¬ 
nel to reductions in military spending. He notes the general need for 
increased geographic mobility and an expansion in vocational training to 
ease transfers. Daicoff estimates that perhaps 150,000 additional 
civilian employees were added to the payroll of the Defense Department 
during the Vietnam buildup and anticipates that this number will serve 
a 5 a minimum for personnel reductions resulting directly from the end of 
the war. During the past decade various DOD manpower and assistance 
programs helped to ease the adjustment process. The assistance programs 
included the following elements: 

1. The establishment of the Automated Priority Placement System; 

2. The payment of moving or relocation costs associated with the 
acceptance of a new DOD position; 

3. An income protection guarantee which assured employees that their 
existing rate of pay would be maintained for a two-year period if 
they remained DOD employees; 

4. The provision of retraining service in cases where warranted; and 

5. The provision of severance pay for those workers who resigned 
from their Federal jobs. The DOD also provided each affected employee 
factual information permitting him to match his geographical and 
occupational preferences against employment opportunities within the 
Defense Department. 


23 


ACDA/E-156 


Between November, 1964, and July, 1967, 48,484 DOD civilian per¬ 
sonnel were affected by the closure of DOD installations. Of this 
number, 32,418 were placed in other federal government jobs and 16,066 
were released from Federal employment. Thus, approximately one-third 
of the employees chose to accept private employment rather than to 
continue their Federal careers. This relatively high rate of separation 
occurred despite considerable efforts expended in offering alternative 
Federal opportunities. Some of the factors contributing to this high 
separation rate were the following: 

1. The expanding economy provided many job opportunities in the 
local communities thus eliminating the need to move from the area; 

2. Certain classes of workers such as women, who may be secondary 
wage earners, older people near retirement, and younger workers 
less committed to career channels, are less likely to make a physi¬ 
cal move in order to find new employment within the government ser¬ 
vice. On the other hand, more skilled primary wage earners seem 
more willing to move appreciable distances in order to maintain 
their career status. 

Generalizations from this experience should be made with care. For 
one thing, during the 1964-1967 period DOD was increasing its total em¬ 
ployment due to the expansion of activities associated with Vietnam. Thus, 
Federal jobs offered to the affected DOD civilian employees came from: 

1. Expanded DOD employment due to the Vietnam war and 

2. Normal replacement of approximately 5 percent of Federal 
civilian employees each year. 

The end of the Vietnam hostilities or an arms limitation agreement 
will probably have varying results. It is likely that DOD 
total employment will be falling at such a time and while Federal 
offset programs may require additional personnel, such increases will 
not necessarily match the reduction in DOD employment either in 
numbers or skills. Second, there is a possibility that the reduction 
r3ce c ^ DOD personnel after the Vietnam hostilities are over would be 
more rapid than the very slow rates which characterized closures of 
major installations in the mid 1960's. Under these circumstances the 

need to maintain a high level of employment nationally becomes very 
great. 

V.i.en one turns to the analysis of military personnel and their 
adjustment after the end of the Vietnam war or an arms limitation agree¬ 
ment, the situation becomes considerably more complex than that of DOD 
civilian personnel. The Vietnam buildup increased the armed services 
from 2.7 million in 1965 to 3.5 million in 1968. The end of Vietnam 
fighting may possibly reduce the size of the armed forces by perhaps 

24 




! 


ACDA/E-156 


800,000 men. Coupled with the normal retirement rate of approximately 
60,000 to 65,000 a year, this will add to the pressures upon the 
absorptive capacity of the civilian labor market. The timing of the 
demobilization and the pattern of entry into the labor market by ex- 
servicemen will be very important here. While perhaps 800,000 men 
may ultimately be entering the civilian labor market, from one-fourth 
to one third of them may be expected to seek further education or 
training. If the remaining approximate 600,000 who are discharged 
leave the service over an 18-24 month period, the phase-out will be 
gradua^. enough to permit a smooth transition. Even so, there may still 
be serious structural difficulties. Important here is the question of 
the adequacy of training which the military dischargee and retiree 
has received prior to his moving into the civilian economy. Aside from 
the question of skill transferability as such, there is the further one 
of where the veterans decide to locate and how their preferences com¬ 
pare to the availability of job openings. 

Military retirees also constitute a class that needs attention. 

The typical military retiree leaves the service with approximately 
one-half of his productive life ahead of him. Thus, the possibility of 
a second career is high. Present patterns indicate a tendency for 
military retirees to be rather immobile and geographically concentra¬ 
ted. ^ Unlike the enlisted separatee, the retiree appears to be 
highly self-reliant in job seeking and is not likely to experience 
serious adjustment difficulties. For the average separatee vocational 
and educational training seem to be the major determinants of the ease of 
transition to the civilian economy. Experience under the GI Bills 
of World War II and Korea should provide useful experience in designing 
an effective training system. Professor Daicoff discusses some of the 
elements involved in training and the transferability of skills. It 
has been estimated that 80 percent of military jobs held by enlisted 
men correspond to only about 10 percent of those held by male civilian 
workers/^ Under these circumstances pre-separation training of en¬ 
listed men could play a major role in easing the transition. Presum¬ 
ably, Project Transition, which began in late 1967, was designed to 
accomplish this purpose. Professor Daicoff ends his paper with an 
extended discussion of experience thus far with Project Transition. 

This program is also examined by Professors Allison and Etzioni. 


^Albert D. Biderman, ’’Sequels to a Military Career: The Retired 
Military Professional,” in Morris Janowitz (ed.) The New Military : 
Changing Patterns of Organization (New York: Russell Sage Foundation, 
1964), pp. 287-336; especially pp. 299-301. 

2 'Harold Wool, The Military Specialist: Skilled Manpower for the 
Armed Forces (Baltimore: The John Hopkins Press, 1968), p. 55. 


25 









ACDA/E-156 


1.3.6 Industrial Diversification Efforts 

Professor Weidenbaum writing before becoming Assistant Secretary 
of the Treasury for Economic Policy, reviewed the post World War II 
and post Korea experiences of firms attempting to diversify into non¬ 
military areas. Perhaps one of the most difficult problems is the 
fact that many top management officials do not take seriously the 
eventuality of disarmament or even major cuts in the military budget. 

At the end of World War II, the older and more established firms 
reconverted to civilian markets with little difficulty. The more 
specialized defense contractors, particularly those in the aircraft 
industry which had grown from job-shop operations in the pre-war period 
to gianthood during the war, faced a real loss of markets. There were 
many attempts at conversion but most of them failed. In the 1946-1948 
period the major aircraft firms, for example, had sales of only one- 
tenth their former levels and in many cases experienced large losses. 

Most of these diversification efforts were abandoned and Korea brought 
the focus back to military production. After the end of the war in 
Korea, major diversification efforts were directed at close adaptations 
of military work. For example, there was the shift of aircraft firms 
into civilian aircraft markets. There was also some effort to diversify 
into industrial markets that were closely related to defense such as 
production of nuclear reactors, industrial electronics, etc. Never¬ 
theless, most of the non-governmental sales of the major aircraft com¬ 
panies in the mid-fifties consisted of aircraft to the civilian airlines. 

In the late fifties and early sixties attention focused on expanding 
military sales and sales to the space program. The 1963-1964 
cutbacks in military procurement (especially missiles) produced a new 
need to consider diversification toward the non-military markets. The 
direction chosen however was largely toward the civilian public sector. 
Experience with NASA had indicated that the firms * major skill was not 
so much in fabricating light metal (which had dominated thinking after 
World War II) but rather a capability in systems management. The effort 
therefore was to convince non-military government units that they should 
explore the systems approach to civilian-oriented problems. 

Of late, alternative methods of diversification have followed the 
following lines: 1) mergers with other companies in defense and high 
technology industrial markets, 2) licensing by-products of military 
product lines to established commercial firms, 3) joint ventures with 
foreign firms usually in technical areas, 4) creation of by-product 
exploration groups based on internal inventions, and 5) permitting 
military divisions to develop non-military products during slack times. 
The particular route chosen often varies with the size of the firm 
involved. 


26 





ACDA/E-156 


In evaluating obstacles to diversification it should be noted first 
that within the military and high technology government markets, diversi¬ 
fication has been markedly successful. One need only think r* the 
transition from aircraft to missiles to space systems. Nevertheless, 
commercial experience has been rather unsuccessful. Two major problems 
appear to be a lack of management motivation resulting from a prefer¬ 
ence for the lower risks of military production coupled with a 
skepticism that the military market will shrink seriously, and the lack 
of required capability. The major defense firms often have low 
capitalization, little commercial marketing capacity, and limited 
experience in producing high volume output at low unit cost. Also the 
administrative structures of these firms are frequently geared to the 
unique reporting and control requirements of government purchasing 
with emphasis upon very high quality standards and a relatively small 
number of units of output. Professor Weidenbaum feels that firms with 
this background in the weapons systems environment lack a cost conscious 
orientation. Apparently firms operating in both military and civilian 
markets have engaged in very little transfer of personnel between 
product lines or product ideas from government to commercial work 
within the firm. 

• • 

By way of contrast, the lack of a vast distribution network or mass 
production experience is hardly a drawback for government orders. The 
specialized defense contractors have strong engineering design and 
development capability and large aggregations of scientists, engineers, 
and supporting technicians. They can work with exotic materials at 
close tolerances. These components have been successfully welded 
together by executives skilled in systems management. For such firms 
thinking about diversification efforts has tended to be limited to a 
search for new high technology markets within the public sector. 

Particularly within the aerospace complex what is revealed is devel¬ 
opment of a highly unique capability to manage the enormous problems 
of military and space systems work. The point which is still moot is 
whether this particular organizational structure will be equally effi¬ 
cient in dealing with civilian problems. It may be that some new kind 
of organization, perhaps of mixed public-private form like Comsat will 
have to be developed to meet these new needs. 

1.3.7 Impact on Governments 

Professor Allison, drawing upon the literature of organizational 
theory and behavior, attempts to develop a framework for understanding 
the organizational process, particularly the gap between analytic 
alternatives and actual outcomes. 


27 




1 


ACDA/E-156 


After datailing the principles underlying the behavior of organiza¬ 
tions, Professor Allison presents an analysis of how organizational 
change can be effected. Most of his examples are drawn from recent real 
world experiences. 

After establishing the framework for his analysis, Professor Allison 
considers various potential non-military uses of existing military 
facilities. In particular, he concentrates upon the manpower area in¬ 
vestigating Projects 100,000 and Transition and provides suggestions for 
their improvement. 

In the final section of his paper he considers various strategies 
which might be used to minimize organizational impediments in attaining 
desired objectives and draws upon the particular experience of the 
Israeli Defense Forces. 

Professor Allison is somewhat more optimistic than Professor 
Etzioni concerning the capability of the military establishment to help 
solve certain problems in the civilian sector. 

Professor Etzioni views the problems that society may encounter 
as it attempts to effect a significant shift of resources from military 
uses to civilian end purposes. He notes that serious shifts in resource 
allocation require determined leadership and a strong consensus on the 
part of the population. His paper is devoted to an exploration of the 
forces and factors which will enhance or detract from the smoothness of 
the shift to domestic missions after the war is over. 

He begins by indicating that on occasion the values and indeed the 
memories held by particular elites and interest groups in society must 
be changed. While concluding that the U.S. is not run by one elite or 
class but rather a plurality of interest groups, Professor Etzioni notes 
the need to gain consensus among these groups in order to successfully 
launch and conduct new programs. Such an effort of course must overcome 
the fact that the interest groups themselves contest for power while some 
segments of society play only a minor role in the legal process (the poor, 
ethnic minorities, farmworkers, etc.). While most interest groups would 
agree on the desirability of an early end to the war there is no similar 
unanimity of feeling on the alternative uses of such peace dividend as 
may be forthcoming. 

Professor Etzioni concentrates on some of the problems likely to be 
encountered in shifting functions which are now conducted within the 
military establishment. In considering the re-definition of missions, he 
argues against the assignment of military units to civilian domestic 
functions. While conceding that they may be useful in the areas where the 


28 



ACDA/E-156 


specific activity is similar (such as the use of the military air trans¬ 
port service for domestic emergencies) he feels that the risk of their 
doing things in an arbitrary and '’military'’ way overcomes this advantage. 

He attributes the apparent capability of the military to successfully 
cut red tape in particular areas where civilian efforts have been frus¬ 
trated (experiments with new forms of housing construction, hospital de¬ 
sign, etc.) to the relatively low level of such efforts and points out 
that if the military tried to widely undertake civilian operations in a 
manner violative of such civilian norms as building codes, etc., civilian 
interest groups involved would seriously oppose the program. Generally, 
he advocates turning resources over to civilian agencies to undertake 
domestic missions rather than using military units for these missions. 

Etzioni views executives as compliance specialists. He feels that 
the scope of their transferability hinges on the similarity of compliance 
structures. Executives can cross many administrative barriers while hold¬ 
ing to the same type of compliance structure. He then applies this 
analytic framework to a comparison of the relative transferability to 
civilian functions of both combat and noncombat officers. 

Peacetime conversion may require that large-scale units be broken 
up. Etzioni feels that this is more likely to be successful than the 
overall shift of units intact. There are several reasons for this. They 
grow out of the several levels of difference between military and civil¬ 
ian operations. Military operations tend to have a high ideological 
content. In addition, orientation to the nature of the needs of the client 
vary between military and civilian areas because the military clients 
tend to be few, large and to have rather clearly identifiable needs and 
preferences while civilian clients tend to be numerous, relatively small 
and with needs and preferences more difficult to forecast. Also, the 
military generally deals with a hostile environment. One exception 
here used to be the key congressional committees which tended to be quite 
favorably disposed to military budget requests. 

Professor Etzioni concludes by considering in some detail the possi¬ 
bility of shifting the systems analysis approach from the military to 
civilian agencies of government. In terms of the characteristics which 
he sees as important in the application of systems analysis, Etzioni 
feels that it is more successfully accomplished where mass aggregate 
technological systems with many units are involved as well as non-human 
elements. He feels that these conditions are more frequently encountered 
in military than in civilian environments. Nevertheless, even in domestic 
circumstances, systems analysis may offer a powerful heuristic device 
since it develops a sense of the factors involved and their possible 
interrelationships. It also enables one to call attention to alternative 
possibilities and to focus clearly upon all assumptions. On the other 


29 


ACDA/E-156 


* 


hand, it is dangerous in rigid application and Etzioni feels that in 
terms of the quality of the data and theory presently available, civilian 
agencies will find it more difficult to apply than the military. 

The President has requested that Congress consider some new form 
of inter-governmental revenue transfers and Professor Diacoff has analyzed 

% ( ~ m 

some of the issues involved in this area. If some form of revenue 
sharing does in fact develop, it will clearly have an impact on govern¬ 
ments and Daicoff feels that this is more likely to occur as a result 
of broad shifts in defense spending rather than as a short term conse¬ 
quence of peace in Vietnam. The arguments in favor of revenue sharing 
include the following: 

1. Potential growth in revenues at full employment will present 
us with a choice between increased government expenditures and/or tax 
reductions. Growing tax receipts at the federal level will provide re¬ 
sources for transfer to lower levels of government; 

2. General dissatisfaction exists with the present state of local 
tax sources in terms of the well-known deficiencies of property, sales, 
and excise taxes; 

3. Distortions inherent in the present system lead to geographic 
raisallocation of resources; 

4. The low income elasticity of local tax revenues inhibits these 
taxes from growing as rapidly as income grows; 

5. Projected continuing deficits in state and local budgets; 

6 . The growing reluctance of the citizenry to approve tax increases 
or bond issues to finance local civil government needs; and 

7. As a consequence of the other points, the increasing rate of de¬ 
parture from office of effective mayors and governors. 

There are a number of alternative approaches which may be taken to 
improve the fiscal position of state and local governments. These in¬ 
volve changes in: 

1. Debt policy which might facilitate state and local borrowing; 

2. Expenditure policy wherein the federal government would itself 
undertake to fund more of the activities of state and local govern¬ 
mental units; and 

3. Revenue policy, which would either permit state and local taxes 
to increase in like amount as federal taxes are reduced or provide 
federal tax credits for state and local government income taxes. 

Professor Daicoff discusses some of the difficulties which may be 
encountered in fiscal policy due to lags between the adoption of pro¬ 
grams and their impact on the economy and how revenue sharing would bear 
upon fiscal policy lags. He concludes that the transfer of resources 
from Federal to state and local governmental units is a desirable policy. 


30 


ACDA/E-156 


1.3.8 Long Run Impact on National Income Shares 

Professor Boulding has examined the behavior of the national income 
accounts between 1929 and 1969. The concept of gross capacity product 
was utilized as a base rather than gross national product. Gross 
capacity product may be defined as what the gross national product would 
have been if all resources had been fully utilized. 

Perhaps the single most important and in a sense surprising find¬ 
ing is the sharp decline in the role of personal consumption expendi¬ 
tures. They dropped from 72.6 percent of gross capacity product in 
1929 to 59.8 percent in 1969. During the same period while defense 
expenditures increased from 0.6 percent to 8.2 percent of capacity 
product, Federal, state and local civilian government expenditures grew 
from 7.4 to 13.0 percent. Between the same two years, gross private 
domestic investment dropped 0.7 percent and net exports by 0.8 percent. 
Thus it is basically the American consumer who has paid for the in¬ 
creasing share of governmental activities, both military and civilian, 
during this forty-year period. 


Over the same interval, Federal civilian government purchases in¬ 
creased from 0.6 percent to 2.4 percent of capacity product while state 
and local government units increased their share from 6.8 to 10.6 percent. 

Within the household sector consumption expenditures also have 
followed interesting patterns. The share of durable goods has increased 
from 8.7 to 9.3 percent of capacity product. This basically reflects 
an increase in the automobile component of durable goods consumption. 
Non-durable goods during the same period declined from 35.4 to 25.3 
percent and services from 28.5 to 25.2 percent. Within the non-durable 
category, food and clothing expenditures, excluding alcoholic beverages, 
dropped sharply from 27.1 to 17.7 percent of capacity product. Gasoline 
and oil on the other hand have increased very slightly from 1.7 to 2.2 
percent of capacity product, notwithstanding the enormous increase in the 
role of the automobile in this period. Major components of services, 
housing, housing operations, transportation, and other services are all 
down, with housing leading the decline from 10.8 to 8.7 percent of 
capacity product. 

When the analysis is shifted to the various sources of personal in¬ 
come the growing corporatization of the American economy is obvious with 
an increase in the compensation of employees from 48.1 to 58.6 percent 
of capacity product, while supplements to wages and salaries grew from 


31 



ACDA/E-156 






just under one percent to 5.5 percent. The shares of business and pro¬ 
fessional income plus the income of farm proprietors which together 
constitute the unincorporated sector of the economy declined from 14.3 
perceint to 6.9 percent. Rental income of persons, net interest, and 
dividends also declined appreciably in the interval. Payment to old 
age and survivors disability insurance funds grew from zero to 3.4 
percent. Despite the large numbers of citizens serving in the armed 
forces during this period, veterans benefits did not change much, going 
from 0.6 percent in 1929 to 0.9 in 1969. Corporate profits were down 
from 9.9 to 9.2 percent and personal savings up from 4 percent to 4.9 
percent. Once again the consumer ! s heavy burden is indicated by the 
growth of personal tax and nontax payments from 2.4 to 12.2 percent. 





When shorter term periods are examined, certain changes appear. 

For example, during the Second World War the expansion in the national 
defense area came largely at the expense of gross private domestic in¬ 
vestment and the expenditures of civil government. Also, the decline 
in the relative importance of defense expenditures between 1955 and 
1965 was largely compensated by an increase in civil government functions. 


In earlier periods when the erroneous belief was fairly widespread 
that the American economy required military expenditures to remain 
prosperous, there was a belief that such military expenditures were 
largely costless since the resources going into them would otherwise, 
it was believed, have been unemployed. Interestingly, now with people 
somewhat better informed about the ability of the American economy to 
prosper without military spending the real costs of such expenditures 
are becoming much more obvious, forcing a concern with questions of 
choice and priorities. The period during which a variety of needs could 
be met by resources being freed from the agricultural sector is over and 
the largest remaining eligible area to be tapped would appear to be 
national defense spending. 


32 



ACDA/E-156 


1.4 POLICY ALTERNATIVES AND THEIR IMPLICATIONS 

In his January 1967 Economic Report , President Johnson instructed 
the various Federal Agencies to step up and integrate their ’’planning 
for peace." At the same time he listed six possible courses of action 
for study requesting the relevant agency heads: 

”—to consider possibilities and priorities for tax reduction; 

M —to prepare, with the Federal Reserve Board, plans for quick 
adjustments of monetary and financial policies; 

"—to determine which high priority programs can be quickly 
expanded; 

"—to determine priorities for the longer range expansion of pro¬ 
grams to meet the needs of the American people, both through new and 
existing programs; 

"—to study and evaluate the future direction of Federal financial 
support to our states and local governments; 

”—to examine ways in which the transition to peace can be smoothed 
for the workers, companies, and communities now engaged in supplying our 
defense needs, and the men released from our armed forces. 

This list highlights the interrelations between short-run questions 
of stability during the transition from war to peace and more fundamental 
underlying issues of social and economic policy. Ultimately, resources 
freed from defense uses will be distributed between public and private 
uses in accordance with the desires of the voting public. This formu¬ 
lation of the problem is too simple, however, since there are not simply 
homogeneous choices available labeled public and private. Within each 
broad class, there exist many additional competing programs and uses for 
such resources as may be made availabe by reduced military spending. The 
specific form taken by tax reduction measures, for example, will depend 
upon the sector to be stimulated, business investment or household con¬ 
sumption. Competing theories of economic growth as well as of practical 
politics underlie such a choice. Within the public sector, agreement is 
far from unanimous on the priorities to be assigned to health, education, 
housing, transportation, etc. Here also, broad category designations 
veil the differences. Is a massive upgrading in elementary school 
education at the lower grade levels more important than bringing under¬ 
privileged youth into the colleges and universities? What of vocational 
education and junior colleges? 

These are, of course, not new problems that arise directly out of 
demobilization. However, the belief that appreciable quantities of funds 

-oZ 

Economic Report of the President Transmitted to the Congress 
January, 1967 (Washington: Government Printing Office, 1967), p. 24. 


33 







ACDA/E-156 


will soon be available resulting from disengagement in Vietnam and some 
strategic arms limitation agreement understandably stimulates the com¬ 
petition for such funds among new claimant candidates. The situation is 
reminiscent of the famous statement attributed to Willie Sutton. In 
reponse to the query why a man of his talents robbed banks he responded 
n ...because that f s where the money is." The same point is stressed by 
Kenneth Boulding in his paper where he notes the close of the era when 
new programs could be funded by resources made available by the high and 
continuous productivity gains in agriculture. 

In deciding matters of social choice the skills of the economist 
provide only limited assistance. They can prove useful, however, in 
providing knowledge about the consequences of alternative choices—their 
likely costs, benefits and related effects—so that the process of choice 
may be better informed. Weidenbaum has arrayed a range of options in 
matrix form which conveniently portrays the more important alternatives 
open in each of President Johnson’s categories of action and the policy 
issues which they pose. His matrix is reproduced as Table 5. 

If the decision process is to be responsive to the impact of 
changes in defense spending critical problems of timing and information 
will have to be dealt with. Policy must be established within the con¬ 
text of the existing state of affairs in the economy at large. It is 
now painfully clear that the likely reaction to a given reduction in 
military spending will vary with the rate of change in other kinds of 
spending then under way. A cut in defense spending would be a welcome 
relief from an over-employed inflation-ridden economy or an added 
problem to an economy already moving into recession. At the time of 
this writing the West Coast centers of the aerospace industry have been 
experiencing widely publicized distress under the combined burdens of 
reduced military and space orders and an appreciable decline in civilian 
aircraft production resulting from a failure of civilian airline traffic 
to reach expected levels .^ In the state of Washington the important 


27 

A close examination of the composition of employment and recent 
unemployment in the West Coast aerospace industry suggests that the 
problem is not long term and structural in nature. The Federal Reserve 
Bank of San Francisco reports that most of the industry’s recent layoffs 
(70 percent in California and 57 percent in Washington) have been among 
blue collar, production line workers. The Bank also states that the 
greater relative reduction in white-collar jobs in Washington’s aerospace 
layoffs reflects the buildup of technical and professional staffs by 
employers in that state between 1965 and 1967 in the (largely unsuccess¬ 
ful) attempt to acquire new military and space contracts. See Donald 
Snodgrass, "Aerospace in the Doldrums," Federal Reserve Bank of San 
Francisco Monthly Review , July, 1970, pp. 148-150~ 


34 







ALTERNATIVE POST-VIETNAM ADJUSTMENT ACTIONS 


ACDA/E-156 










cd 

X 








3 






CO 

4-J 







-3 

o 




rH 


3 

*H 







4-1 

•H 



O 

cd 


CD 

$ 


• c\ 





S 

4-J 



CO 

cj 


<4-1 



CO 


CD 

6 


o 

3 



r—1 

CO 


<D 

3 


rH 


rH 

CD 


p 




cd 

•H 


X5 

P 


cd 


-Q 

X 


00 iH 




C4-I 



CD 


o 

4-J 

cd 

4-1 



P 


<4M 

• 0 % 

1 


4-4 

CJ 


00 

CO 

4-J 



CO 

44 


o 

00 

to 


O 

3 



o 

Ql. 

00 


3 

CO 



3 

p 



C 


B 

B 

<D 

3 

3 

CO 

•H 


3 

•H 

cd 


3 

o 


3 


O 

•H 

3 

P 

XJ 


CD 

E 

4-J 


O 



CD 

4-4 

CJ 

3 

3 

3 

a) 


4-1 


CD 


•H 

CO 

X) 

4-1 

o 

cd 

•iH 

CO 

> 

p 


4-1 

4-1 

3 


4H 

3 

3 

1 



cd 

CO 




3 


o 


cd 

CO 

cd 

00 

3 

X) 

4-J 

1—! 

3 



E 

3 

B 


N 

P 

B 

3 

o 

3 

4-J 


o 

£ 



*lH 



•H 

O 

a) 

O 

•H 

cd 

cd 


•H 

o 


cd 


CD 


i — 1 

t» 

"3 

rH 

4-1 



U 

44 

a 

CO 


CO 

4J 


•H 

1 



cd 

rH 

44 

*H 

3 

3 

a) 

to 

CO 

cd 


4-J 

CO 

<D 

4-1 

CJ 

cd 

O 

T—i 

N 

♦H 

> 

rH 

CD 

•H 


3 

CD 

4-J 

O 

•H 

o 


o 

*H 


•H 

•H 

3 

P 



cj 

cd 


4-4 

•H 

CO 

Pm 

rH 

CO 

4-1 


4-1 

a 


4J 

3 

00 

CD 

•H 

B 

X) 


•H 

3 

a 

cd 

P- 

o 


(X 

3 

CD 

a 

4-J 

o 

o 


.p 

CO 

<D 

B 

B 

p 


B 

O 

3 

•iH 

3 

3 

-3 


3 

P 

•*—> 

•rH 

o 

a 

X 

o 

CO 

00 

o 

CD 

o 

4-1 


4-J 

3 

x 

P 

p 

a 

•H 

u 

CD 

00 


-a 

a 

CD 


00 

> 

o 

Pm 

p< 

cd 

B 

Pm 

3 

cd 

CJ 

•H 

CD 

E 


3 
















o 




















•H 











X 









44 



3 








cd 









3 



O 






CO 


4-1 

CD 








3 



•rH 






4-J 



> 






£ 


3 



44 






<D 


3 

3 



x> 



PQ 


3 



3 







CO 

E 

CD 



3 


i 

<J 


& 



44 


to 


3 


o 

<D 

o 

CO 



cd 


i 

hH 

CO 

E 



*4 


3d 


•H 


cd 

> 

o 

CD 

4-1 




CO 

i 

3 

O 

0\ 


O 


Pu 




3 

•H 

3 

3 

CD 


oo 


CD 

•H 


CJ 

3 


Pu 


3 


CO 


P 

4-J 

*H 




3 


CJ 

4-1 

X 


O 


3 


P 


3 



3 


#\ 

p 


•rH 


p 

3 

CJ 

44 

•rH 


3 

rH 

00 


O 


P 

<D 

<D 

CO 

cd 


*3 

CO 

3 

cd 

3 

3 

44 


3 

o 

o 

CO 

*H 


CD 

CJ 

> 

CD 

E 


3 

3 

o 


CO 

3 

3 


P 

p 

3 

<D 

4-1 


S 

3 

•H 

4-1 



CD 

O 

CO 



E 

CJ 


44 

44 

3 

> 

a 


o 

•rH 

4-J 

cd 

3 


rH 

•H 

CD 

H 

* 

to 

3 



3 

3 

•rH 

3 


rH 


cd 

>4 

<D 



4-1 

>4 

oo 

CO 

o 

X5 


• • 

O 

CJ 

4-1 

X 



4-J 

00 




rH 

«d 


CO 

E 

rH 

3 


3 

CJ 

o 

cd 

CD 


3 

3 

a) 

4-» 

O 


cd 

>4 

>4 


3 

Pm 



44 



3 

P 


♦H 

a> 

3 

3 



>4 

CD 

cd 

#N 

J4 

E 

• • 


3 

3 

• • 

*4 




E 


3 

X> 


CD 

a 

rH 

3 

00 

3 

3 


3 

O 

3 

CD 

X} 


CO 

4-J 

cd 

O 

3 


X 

o 

•H 

O 

o 

3 

44 

X 

E 

•rH 

44 

4-J 

p 


3 

CO 


O 

cd 


CD 


E 

•H 

p 

3 

3 

44 

44 

44 

3 

i—1 

cd 


O 

CD 

44 

CO 



pH 

CD 

•rH 

4-1 

a 


3 

rH 

3 

3 

3 

< 

o 


•H 

> 

O 

•rH 

#\ 



CD 

CO 

cd 


c* 

E 

3 

3 

rH 

E 


X 


4-> 

3 


"3 

CO 

CO 

3 

4-1 


P 

rH 

3 

44 

3 

> 

r-H 

44 


i 


(J 

•rH 

3 


4-J 

3 

•H 

3 

00 

o 

3 

O 

3 

X 

3 

O 

3 


CD 


3 


O 

3 

3 

O 


cd 

3 

rH 

3 

•rH 

3 


•H 

a. 3 


X 


*3 

X) 


•H 

CD 

•H 

CO 

Pi 

•H 

a 

O 

44 

> 

«N 



> 


4-1 


CD 

CD 

4-1 


E 

4-1 

CD 

cd 

CO 

X 


CJ 

3 

00 rH 


3 


? 



CO 

3 

CO 

CD 

a 

CO 

3 

3 

<D 

4-» 

3 

•rH 

3 

3 

00 

•H 


CO 



td 

4-1 

(D 

3 

cd 

cd 

00 



3 

P 


•H 

CJ 

3 



CO 

CO 

P 

CD 

•rH 

OO 

•rH 

CO 

CD 


<D 

(D 

3 

44 

3 

3 

•rH 

•H 

Q 


O 

<D 

o 

3 

4-1 

3 

3 

3 

3 

3 

CO 

3 

> 

3 

3 

•rH 

3 

3 



P 

4-1 

*•—> 

CJ 

CO 

cd 

3" 

cd 

CJ 

cd 

O 

cd 

3 

3 

g 

3 

to 

3 

uS 


o 

cd 

cd 

3 

3 

J3 

CD 

p 

3 

o 

-3 


O 

O 

3 

P 


O 



<d 

>4 

£ 

M 

M 

C-J 

P 

4-J 

M 

rH 

H 

CO 

CJ 

CJ 

33 

44 

pH 

-3 

Pd 


X~S 








/'“N 










/-N 


rH 


CM 

CO 


rH 



CM 


rH 


CM 


rH 


CM 


CO 


3 

3 




tO 




o 





O 

3 



•H 





•rH 

3 



3 





rH 

O 

44 


3 

p 


tO 

3 

o 

•H 

3 


3 

3 


P 

O 

X Ph CO 

3 

3 


a 

3 


o 

*H 

3 44 

3 

E 


X 

E 


00 

44 

3 rH 3 

3 

3 


w 

3 


3 

O 

3 3 

ft 4 

P 

3 


P 

3 

44 

3 

5>> *rH E 

X 

3 

E 

3 

3 

E 

3 

-3 

P O 44 

w 

t> 

3 

3 

> 

3 

CJ 

3 

3 3 co 


O 

P 

Oh 

O 

P 


Pd 

44 3 3 

X) 

O 

00 

1 

o 

OO 



3 3 *o 

•rH 


o 

00 


o 


X 

3 *H X) 

a 

3 

p 

3 

3 

p 


3 

O pH < 

3 

•H 

pH 

0 

•H 

Ph 


H 

£ 

Pd 



kJ 




35 


Federal Aid to 1) Expansion of existing program grants 1) Choice of program areas 

State and Local 2) Initiation of new grant programs to support 

Governments 3) Block grants, with few strings 2) Decision as to which level 

of government makes the 





TABLE 5 (continued) 


ACDA/E-156 








U 








<13 




cO 




03 




3-4 

CO 







G 



J-i 

O 

3-1 







cO 



03 

B 

<13 



03 







x 


.G 

O 


r— ( 


•4-4 


* 



AJ 

0) 

4-J 

•H 


u 

CO 

O 

G 

00 



03 

X 

o 

e 


o 

G 


•H 

G 



X 



O 



C0 

S 


•H 



S 

03 

o 

c 



>-i 

03 

G 

G 


co 


rH 

4-J 

O 


•4-4 

03 

•H 

O 

•H 

CO 

03 

o 



O 


o 

4-i 

> 

•H 

CO 

03 

3 

4-» 

O 

G 

03 



03 


CO 

>4 

U 

CO 


X 

<0 




> 

G 

c 

4-J 

•H 

CO 

CO 

CO 

X 

>s 

g 

4-J 


♦H 

cO 


> 

— 1 

03 


4-J 

X 

o 

•H 

•4H 


pt 

* 

V4 



4-1 



•H 

rH 

o 

•» 

K 

G 

03 

>> 

c 

c 

CO 

n3 

4-J 

•H 


CO 

03 

O 

CO 

u 

O 

<13 

3 

03 

c0 


03 

4-1 


*H 


H 


6 

O 

4-J 

CJ 

cO 

G- 

•H 

4-> 

4-J 

I—1 

■H 

CO 

4-J 

3-1 

o 

o 

V4 

<4-4 

G 

CO 

cO 

O 

•H 

05 

<13 

Q>* r—1 

•H 

4-J 

03 

03 

U 

•H 

DU 

U 

03 

c 

•4-1 

CO 

CO 


G 

C3 

3 

a 


<u 


03 

<4-4 


03 

M 

03 

03 

03 

o 


Q 

4-J 

60 

CO 

T3 

O 

M 

-G 

>4 

0) 

CO 



H 





U 





< 


03 





3-i 



H 


cO 



2 


•4-4 



w 


rH 





03 

4-J 


H 


s 

G 


CO 


03 

03 


J3 


00 G 

E 




C CO 

4-i 


Q 


•H E5 

CO 


< 


4J 03 

3 



CO 

CO 03 

•r-) 



03 

•H 

03 



> 

X 03 

CO 


J2J 

•H 

0) 4-J 



^4 

4-i 

CO 

u 

CQ 

W 

cO 

C 00 

•H 

g 

hH 

C 

O 0) 

•4-4 

cO 

> 

G 

}-< 

♦H 

34 

1 

03 

03 00 

C3 

00 

H 

4-i 

O 00 

03 

o 

CO 

rH 

C <0 

a 

3-4 

O 

< 

<0 

CO 

a. 

04 


*H 03 





X G 

•4-1 

4-i 

W 


03 CO 

o 

•H 

> 


3-4 


•4-4 


H 

< 

IZ 

Pd 

w 

H 

X 

< 


CO 03 C 0) 

B a> o c 

u cO 3-4 -h <u 

m ^ 3 w ^ 

E m m a 

•h o !fl o t 

3-t U 0) TJ G 

P-t cu £3 <3 co 


CN 




CO 




CO 

3-i 




G 

03 




<0 

M 




>-i 

3-4 



3-i 

03 

O 

03 


O 

4J 


G 

CO 

OO 

03 


cO 

03 

03 

> 

03 


•H 

4-i 


CO 

#\ 

G 

CO 

O 

G 

CO 

CO 

CJ 

4-J 

03 

CO 

Q. 



<4-1 

03 

B 


TO 

0) 

34 

O 


•H 

a 

< 

CJ 


< 





36 


SOURCE: Murray L. Weidenbaum, ’’Peace in Vietnam: Possible Economic Impacts and the Business 
Response," a paper commissioned by the Committee on the Economic Impact of Peace 
in Vietnam, Chamber of Commerce of the United States, September, 1967, p. 14, processed. 






ACDA/E-156 


lumber and plywood industry is also suffering from the steep fall in the 
housing industry, largely induced by the tight money policy component of 
the anti-inflationary program. Apparently, the contribution of reduced 


military orders in Washington accounts for only a minor part of the 
state s problem with "more than 90% of Boeing’s business in the state... 
nondefense. However, the unfortunate concatenation of circumstances 
in that state illustrates the point. 


The need for timely information on changes in defense spending by 
the central budget and economic policy staffs was dramatized by its 
absence during the critical months of the Vietnam buildup in late 1965 
and early 1966. The situation has since been somewhat improved but many 
of our subsequent difficulties in anti-inflationary policy may be traced 
to that period. ^9 

t 

The timing challenge to stabilization policy was also illustrated 
by the rather extended interval required for the recent surtax to make 
its influence felt on the price indexes. Such lags in the impact of 
intended Federal action strongly suggest the need to anticipate desirable 
changes as far in advance as possible. This observation applies with 
equal force on the side of offsets to falling defense spending. The 
literature on economic adjustment has seen more attention to the topic 
of lags in recent years. From the viewpoint of economic policy, it is 
not only important that the Federal offset programs be planned well in 
advance of their need but that such programs be devised with a full 
understanding of their particular lag structure^ and of their unique 

28 

Albert R. Hunt, "Senator Jackson Gets Help from GOP Rivals in 
Washington Race," The Wall Street Journal , September 15, 1970, pp. 1, 27. 

29 

See Murray L. Weidenbaum, "Indicators of Military Demand," 1967 
Proceedings of the Business and Economic Statistics Section , American 
Statistical Association , pp. 208-211. For a useful discussion of the 
problem of data needs see also Roger E. Bolton, "Statistics on Industrial 
and Regional Defense Impact," 1967 Proceedings of the Business Statistics 
Section, American Statistical Associatior , pp. 200-207. 

30 

For a study of this problem see Earl W. Adams, Jr. and Michael H. 
Spiro, The Timing of the Impact of Government Expenditures . This soon 
to be released study performed for the U.S. Arms Control and Disarmament 
Agency compared inside (legislative-institutional) and outside lags (from 
obligation of funds to economic impact) encountered in such offset pro¬ 
grams as highway construction, space and oceanography, and urban mass 
transit. The important finding that inside lags (both legislative and 
administrative) are the "major culprit" in causing lengthy delays (p. 21) 
reinforces our conviction that the study of economic impact has for too 
long paid inadequate attention to the organizational considerations 
dealt with in the Allison and Etzioni papers in this volume. 


37 











ACDA/E-156 


resource requirements. Ideally, from the viewpoint of offset programs 
designed to absorb resources freed from defense uses in the shortest 
possible interval, policy makers should know the location, number and 
type of persons being released from military uses, and the same infor¬ 
mation about the needs of particular offset programs and the approximate 
time lags required before the new programs can be started. 

At the present time our information requirements are far from this 
level of adequacy. One of the most serious deficiencies remains our 
inability to trace prime contract awards down through the various levels 
of subcontracts. Such a capability to know who and where are the sup¬ 
pliers below the prime contractor level is a prerequisite to pinpointing 
the effects of changes in particular weapons systems. A similar lack of 
information limits our capability to accurately foresee the impact of 
various compensatory government spending programs. Professor Galbraith 
has commented that it is a matter of no great concern which government 
programs replace strategic weaponry provided they are "roughly equivalent 
in scale and technical complexity." 11 This may be true but we know very 
little about the characteristics of such offset programs. Oceanography 
and urban transit are unlikely to have the same economic impact. Partic¬ 
ular government programs may come closer to absorbing the kind of 
resources liberated by reduced military spending than do others. Such 
information would be very valuable in transition planning. Other criteria 
must, of course, be considered. The program which comes closest to 
being a good substitute for high technology weapons production in terms 
of skill transfers, etc. may not be the highest priority program on the 
policymaker's list. Nevertheless, this type of information would contri¬ 
bute much to more rational decisions. 

1.4.1 Policy Recommendations 

Various recommendations appear throughout this report which have an 
important bearing on public policy. For the convenience of the reader 
they have been brought together in this section and organized under four 
major headings: policies designed to aid the adjustment of individual 
defense workers and of major defense contractors, to encourage the use 
of military resources for social needs, and to aid the adjustment and 
development of affected regions of the country. 

1.4.1.1 Adjustment of Individual Defense Workers 

The following recommendations are designed to help ease the transi¬ 
tion of displaced defense workers: 


31 

John Kenneth Galbraith, The New Industrial State (Boston: Houghton 
Mifflin Company, 1966), p. 346. "" 


38 






ACDA/E-156 


\ 

1) Greater reliance and support should be given to the M tent inter¬ 
view process run by the affected company or as an on-site program cf the 
Employment Service. 

2) The Computerized Job Bank and matching programs should be ex¬ 
panded and include special consideration of the defense industry occupa¬ 
tional structure. 

3) A minimum of 6 weeks* advance notice of contract cancellation 

or termination should be given to workers to prepare for a smooth transi¬ 
tion. 

4) A public insurance plan is needed to give homeowners liquidity 
of equity and protection against erosion of value. This plan will 
eliminate a major impediment to mobility. 

5) The ’’experimental lab?r mobility" projects of the U.S. Depart¬ 
ment of Labor should be expanded to include laid-off defense workers. 

These projects include assumption by the government of relocation 
costs including travel expenses for an interview with a prospective 
employer. 

6) Pilot retraining projects for laid-off defense workers which 
emphasize on-the-job-training as opposed to classroom training should be 
expanded. 

7) The social security laws should be revised to provide early 
retirement at no penalty for laid-off defense workers. 

8) The conflicts between regulations governing unemployment in¬ 
surance eligibility and provisions for severance pay should be eliminated. 
These conflicts' exist in 22 states and serve to reduce income to the 
laid-off worker. 

9) Similar conflicts (in # 25 states) between the unemployment in¬ 
surance system and retraining programs should also be eliminated. These 
conflicts serve to discourage retraining. 

1.4.1.2 Assistance to Firms Losing Large Volumes of Military Orders 

To aid individual firms in applying their capabilities in non¬ 
military areas, the Federal government could: 

1) Subsidize non-military research and development. This might be 
done by 

a. providing a tax rebate for commercial R & D similar 

to the tax credit for investment in producers* durable equipment. 

b. the establishment of some form of joint industry-government 

financing of commercial R & D efforts with repayment of the govern¬ 
ment share if profitable operations result. 


39 



ACDA/E-156 


c. providing long-term loans and loan guarantees and the 

leasing of idle government owned plant and equipment for non¬ 
defense R & D work. 

d. providing technical assistance to discover non-military 

applications for surplus scientific and engineering skills. 

2) Increase its nondefense procurement programs in ways designed 
to utilize defense-oriented skills in meeting public sector requirements 
in nondefense areas. 

3) Permit defense contractors to charge some commercial product 
planning as an allowable cost on defense contracts. 

1.4.1.3 Alternative Uses of Military Resources for Social Needs 

The following recommendations should help guide the transfer of 
military resources to social needs: 

1) Perhaps the Armed Services can offer a more benign socialization 
experience for ghetto residents by actively recruiting individuals from 
disadvantaged backgrounds, treating them "no different from anyone else," 
and persuading them that they can do a job for which they will be 
rewarded. Various training/career inducements utilizing the large scale 
military vocational education system can be used to attract prospective 
enlistees. 

2) Project Transition should be expanded and deepened to provide 
soon-to-be-discharged servicemen with marketable skills. Training under 
Project Transition should be made available to servicemen on overseas 
assignment to correct the present inhibiting requirement that limits 
eligibility to military personnel with six months of remaining service 
time. Many returning veterans are discharged within a short time after 
their return to the United States and thereby are not able to benefit 
from the program. The bottleneck in the construction industry might be 
eased by increasing the number of servicemen receiving training in the 
building trade occupations. 

3) The large scale vocational education system operating in the 
military should become the focus of a major research venture to test the 
effectiveness of various teaching techniques with servicemen of diverse 
backgrounds. The results should be widely disseminated for the benefit 
of civilian education. 

4) Information on the location of job opportunities should be pro¬ 
vided to servicemen soon-to-be-discharged to prevent their congregating 
in a few already overcrowded urban areas. 

5) The criteria for Federal contract placement might be broadened 
to allow weight to be given to societal benefits resulting from employ- 


40 




\ 

ACDA/E-156 


ment growth in the ghettos and other areas of underprivileged manpower. 

i 

6) A special program to recruit from depressed regions and urban 
ghettos to fill the many civilian jobs in DOD not requiring managerial 
or high skills should be considered. 

7) When military bases or other facilities are to be closed, 
adequate notice should be provided to all concerned to plan for the ad¬ 
justment. Studies suggest that one year between notification and 
closure is an optimal time period. 

8) Surplus military scientists and technicians might be transferred 
to a new ’’think tank” concerned with the solution of domestic problems. 
Its work should be closely integrated with a new government agency con¬ 
cerned with the coordination of civilian problems. The provision and 
delivery of health care in the United States has come under severe 
criticism and the military medical system should be utilized as a pool 
for experimentation and innovation with approaches and techniques. 

Housing and public order are also critical areas where the military 
experience might be examined for feasibility of transfer to the civilian 
sector. The transfer of concepts such as systems analysis to domestic 
missions should be carefully considered. Such transfers must be under¬ 
taken with full awareness that civilian systems are often more decentral¬ 
ized, pluralistic and less technological than their military counter¬ 
parts , and hence do not lend themselves as easily to this approach to 
problem solving. 

9) In instances where military units can be used directly to 
handle clearly identifiable civilian needs, simple unit transfer may 
suffice. Such a case might be the transfer of a military hospital unit 
to a State Department of Public Health. In such cases, a military- 
civilian matching center could be useful. It is more likely, however, 
that major modifications of the military unit will be necessary. The 
reassignment of entire professional teams or laboratories may facilitate 
a quick transition but contains the danger of retention of ingrained 
"military” approaches which may be undesirable. Ideally, ex-military 
teams of professionals or individuals should be transferred in small 
numbers at a time to allow the established receiving civilian units to 
abscrb the newcomers. 

1.4.1.4 Regional Adjustment and Development 

A high priority use for funds and resources released from military 
purposes is in the area of regional and urban problems. A prerequisite 
to effective long-range action here is the formulation of a national 
policy for guiding regional and urban development. The types of issues 
which such a policy would have to consider are discussed in the 
Cumberland paper. In addition, however, there are challenging short- 


41 



ACDA/E-156 


term problems which hinder the attainment of a smooth transition for 
communities and regions particularly vulnerable to cutbacks in military 
spending. Five general policy recommendations have previously been 
advanced by the National Planning Association and warrant repetition; 

1) A clear statement by the Federal government on the necessity 
for arms reduction planning should be made to combat scepticism concern¬ 
ing its likelihood. 

2) The Federal government should underscore its committment to 
the maintenance of high levels of employment and purchasing power as 
required under the Employment Act of 1946. In addition, it should 
clarify the degree of its obligation to assist individual firms and 
specific regions of the country. 

3) Both national and regional policies of the Federal government 
adopted to meet the impact problems of arms reduction should be blended 
with other policies to promote economic growth and to aid in readjust¬ 
ment to other dislocations. Thus, attention should be focused on the 
alleviation of distress, regardless of its particular cause. 

4) A reexamination of manpower and unemployment assistance policies 
should be conducted with respect to their adequacy in (a) aiding the 
adjustment process and (b) mitigating distress situations prior to 
longer run adjustment. 

5) More careful advance planning by all levels of government and 
interested private groups is necessary to enable vulnerable communities 
to make a successful and rapid transition. 


42 


ACDA/E-156 


THE MANY DIMENSIONS OF THE MILITARY EFFORT 
Bernard Udis and Murray L. Weidenbaum 

II.1 OVERALL MILITARY SPENDING 

An effort to evaluate the economic importance of national spending 
for military purposes must grapple with the issue of the appropriate 
backdrop against which the defense budget should be measured. The 
broadest and most widely used measure of military spending is the Office 
of Business Economics (OBE) series on Federal Government Purchases of 
Goods and Services for national defense. Essentially it consists of the 
costs of the military functions of the Department of Defense and military 
assistance to other nations. Table 1 shows the long term behavior of 
this series since 1939 in absolute form and also as a percent of all 
Federal purchases of goods and services, of purchases of goods and 
services at all government levels (Federal, State, and Local), and of 
Gross National Product. 

* 

Rapid growth of GNP, of the civilian expenditures of the Federal 
Government and of state and local governments has brought down the share 
of GNP and of all government purchases of goods and services going to 
military purposes to 8.5 and 37.1 percent, respectively, in 1969. Despite 
recent declines from the cold war highs of the 1950's, the relative 
magnitude of military purchases remains striking. Over three fourths 
of all Federal purchases of goods and services and almost 45 percent of 
Federal budge£ outlays (Table 2) have gone for defense purposes in 
recent years. 

The secular increase in the Federal Government's concern with defense 
matters is brought home dramatically by an examination of changes over 
the past three decades. As shown in Table 1 the share of Federal outlays 
on goods and services for defense during the 1960's (79.3%) was remark¬ 
ably close to its level during the 1940's (79.8%). It is, however, down 
from the 86.3% of the cold war years of 1950-1959. Similarly, Federal 
budgetary outlays for defense averaged 45.6% during the 1960's, down from 
the 57.9% in the 1950-1959 period and 55.2% during the 1940's. Despite 
the recent trend downward, it remains true that military outlays account 
for a massive portion of Federal expenditures. 

To state that the military outlays of the United States have been 
and are large by various of these measures is not to state a judgment 
about their appropriaten ess or adequacy. This vital topic is not one of 

^The apparent discrepancy between these two series is attributable 
to the fact that the Federal Budget includes sizeable interest, trans¬ 
fer, and subsidy payments in addition to purchases of goods and services. 

43 


/ 




ACDA/E-156 


the concerns of this study and hence it would t^e inappropriate for the 
present writers to enter into this debate now. 

II.2 GEOGRAPHICAL DISTRIBUTION 

The distribution of military contract awards among the various re¬ 
gions of the country is quite uneven and changes over time. These points 
are illustrated in Table 3. Since the Korean War (FY 1952) , the value 
of prime defense contracts awarded has dropped from 25 percent to 17-18 
percent in the Middle Atlantic states; dropped from 27 percent to 12 
percent in the East North Central region; and climbed sharply in the 
South, particularly in the South Central area, rising there from 6 per¬ 
cent to over 15 percent. The share of the Pacific Coast states, plus 
Alaska and Hawaii, almost 22 percent, is somewhat above the 1952 level 
of 18 percent but some six points below the cold war year of 1962, largely 
reflecting sharp drops in California and Washington. 

Part of the shifts may be due to regional specialization in parti¬ 
cular military goods, the importance of which will vary with different 
strategic programs and their coneommitant procurement mixes. Thus, 
from 68 to 75 percent of all tank-automotive contracts have been awarded 
in the East North Central region in recent years (see Table 4). That 
this is not a complete explanation is evident from the appreciable re¬ 
gional shifts within the various classes of military equipment shown in 
Table 4. Of particular interest is the gain in the share of aircraft 
prime contracts awarded in the South Central region—from 7.5 in FY 1962 
to approximately 25 percent. The same region also showed an impressive 
gain in ammunition prime contracts and a jump to near dominance in ship¬ 
building in FY 1970 countering the declines in the shares of the New 
England and Pacific Coast states. Indeed, the South seems impervious 
to cycles in either the size or composition of defense spending having 
steadily increased its relative standing as a defense producing region 
from the Korean War through the Cold War and Vietnam (see Table 3). 

Another measure of regional variation in the importance of defense 
operations is found in the "defense dependency" ratio , the ratio of 
defense-generated employment to the total work force. Table 5 presents 
such ratios for both civilian and military personnel, by state, for 
December of 1965, 1966, and 1967. The civilian ratio tends to be more 
stable. Eight states have had civilian ratios of 5 percent or more at 
each reported point in time. In declining order of their most recent 

2 

The charges that present military expenditures are excessive due to 
waste in weapons acquisition or because of exaggerated concern over the 
threat posed to the security of the United States by foreign powers are 
legion. For a balanced reply which stresses the ravages of inflation and 
frequent pay increases into our true military strength, see Robert C. 

Moot, "Address to the 1970 Graduating Class of the Army Comptrollership 
School, Syracuse University, July 31, 1970," processed. 


44 





ACDA/E-156 


ranking, they are: Alaska (10.1), Utah (9.2), Hawaii (8.8), Virginia 
(8.5), Connecticut (7.6), Maryland (6.6), New Hampshire (6.6), and 
California (6.3). The ratio for the nation was 3.6. The importance 
of defense expenditures for such metropolitan areas as Washington, D.C., 
Boston, Wichita, Cape Kennedy, Los Angeles, Seattle, and Huntsville is 
well known, and, when induced employment effects are considered, it has 
been estimated that in some areas almost 50 percent of local jobs can 
be traced to defense-related expenditures. 

II.3 INDUSTRIAL DISTRIBUTION 


Only a relatively small number of industries (largely durable goods 
producers such as aircraft, electronics, motor vehicles, petroleum re¬ 
fining, chemicals, rubber, and construction) are heavily involved in 
defense work, and only a few of their constituent companies account for 
the larger part of defense contracts. Military contracts doubtless 
become more widely diffused through companies, industries, and regions 
when the various levels of subcontracting are considered. From FY 1960 
to 1965 the estimated share of military prime contract awards performed 
in the United States which were subcontracted fell from 45.4 percent to 

33.7 percent. The post 1965 years of the Vietnam enlargement saw a re¬ 
covery in the subcontracted share to 39.9 percent in FY 1969, followed 
by a dip to 38.3 percent in FY 1970.“* Of all subcontract awards in FY 
1967, 43.3 percent went to small business firms. This was a recent high 
point and the small business share of subcontracts.has fallen back to 

36.7 percent in FY 1970, the lowest since FY 1959. 


3 

See Charles Tiebout, "The Regional Impact of Defense Expenditures: 
Its Measurement and Problems o.f Adjustment," in U.S. Congress, 88th Con¬ 
gress, 1st Session, Senate Committee on Labor and Public Welfare, Sub¬ 
committee on Employment and Manpower, Nation's Manpower Revolution, Part 
7 (Washington: Government Printing Office, 1963), pp. 2516-2523. 

^Murray L. Weidenbaum, "Defense Expenditures and the Domestic Econo¬ 
my," in Stephen Enke (ed.), Defense Management (Englewood Cliffs, N.J.: 
Prentice-Hall, 1967), p. 322. 

^Office of the Secretary of Defense, Directorate for Information 
Operations, Military Prime Contract Awards and Subcontract Payments or 
Commitments, July 1969-June 1970 (Washington: Department of Defense, 
1970), pp. 12-13, and 57, Tables 3 and 18. 

6 Ibid., p. 57, Table 18. Generally, a small business concern is one 
that is independently owned and operated, is not dominant in its field 
of operations, and with its affiliates does not employ more than a 
specified number of employees (usually not more than 500, 750 or 1000) 
depending on the type of product called for by the contract. 


45 









ACDA/E-156 


There is some evidence that in recent years the concentration among 
prime contractors has lessened somewhat. Table 6 indicates a drop in the 
share of military prime contract awards accounted for by the top one 
hundred companies from three-fourths in FY 1961 to 64-68 percent in recent 
years. This move toward deconcentration may well be a temporary phenomenor 
reflecting the peculiar needs of the Vietnam conflict. 


There is limited turnover among the top 100 defense contractors and 
thirty-eight firms have been on the list every year since fiscal 1959. 
Six firms (Lockheed, North American, General Dynamics, General Electric, 
ATuT, and United Aricraft) have been among the top ten defense contrac¬ 
tors every year between 1959 and 1970. Sperry Rand, Boeing, and General 
Motors join the list of annual repeaters when it is expanded to take in 
the top twenty firms. Other occasional visitors to the top twenty group 
include Avco, Bendix, Grumman Aircraft, General Tire, Hughes, RCA, 
Westinghouse, IBM, Textron, Honeywell, Ford, LTV, Olin Mathieson, Kaiser, 
Thiokol, and IT&T. The high concentration among aerospace and electron¬ 
ics specialists is apparent. 


The low turnover among the leading military producers reflects the 
barriers to both entry into and exit from the defense market. Particular 
ly in aerospace and electronics,entry is limited to those firms possess¬ 
ing the scientific and engineering skills required to design and manu¬ 
facture modem weapons systems. Exit barriers may be inferred from the 
relatively unsuccessful attempts of these firms to penetrate civilian 
markets. It should be noted, however, that the list of the top 100 
Defense Contractors is a better indicator of Defense Department depen¬ 
dency on particular firms than of the reverse relationship. While a 
complete analysis is difficult due to data limitations it is clear that 
the military work performed by many firms among the top 100 accounts for 
a relatively small share of their total sales. While there is a fair 
degree of overlap between the top 100 defense contractors and, say, the 
Fortune 500, it does not appear that the giants of American corporations 
depend heavily upon defense business. 







The defense program relies heavily upon unique and special purpose 
resources. Weidenbaum told a Congressional committee in 1963 that at 
least 80 percent of the military equipment at the beginning of World War 
I consisted of standard peacetime goods which were the product of normal 


John S. Gilmore and Dean C. Coddington, Defense Industry Diversifi¬ 
cation , U.S. Arms Control and Disarmament Agency Publication 30 (Washing¬ 
ton: Government Printing Office, 1966), pp. 42-53; and Murray L. 
Weidenbaum and A. Bruce Rozet, Potential Industrial Adjustments to Shifts 
in Defense Spending (Menlo Park, California: Stanford Research Institute, 
1963), pp. 25-37. See also the Weidenbaum chapter in this study. 


46 


f 















ACDA/E-156 


peacetime production lines. He estimated the special-purpose proportion 
as up to almost 50 percent in 1941 and to about 90 percent in 1963. 8 

As has been emphasized by Cherington and Galbraith, the procurement 
of sophisticated weapons systems takes place in a rarified atmosphere in 
which the distinction between buyer and seller becomes blurred due to 
the interdependence of the organizations, the growing commonality of goals, 
and the daily intermingling of personnel from both groups over extended 
periods of time. 9 Thus, with the exception of relatively standardized 
items with close civilian counterparts such as food, clothing, housing, 
etc., the majority of our military expenditures are made in an environ¬ 
ment far removed from the presumed "arms-1ength" dealings of the market. 1 
Purchases of such specialized items as aircraft (including assemblies, 
engines, and other aircraft equipment and supplies), missile and space 
systems, ships, and electronics and communication equipment were account¬ 
ing for about two-thirds of the net value of military prime contract 
awards in the first half of the past decade. Only with the immediate 
pressures of the Vietnam War to field a large force equipped with con¬ 
ventional weapons has the share dipped below 60 percent in fiscal years 
1966-1969. The burgeoning post-1965 growth in contract awards for com¬ 
bat vehicles, weapons, ammunition, textiles and clothing, military 
building supplies and transportation equipment is shown in Table 7. 

II.4 CHARACTERISTICS OF DEFENSE MANPOWER 

The skills and training of persons employed in defense-related in¬ 
dustries are strikingly different from those of the overall labor force. 


Murray L. Weidenbaum, M The Transferability of Defense Industry 
Resources to Civilian Uses," in U.S. Congress, 88th Congress, 2nd Session, 
Senate Committee on Labor and Public Welfare, Subcommittee on Employment 
and Manpower, Convertibility of Space and Defense Resources to Civilian 
Needs • A Search for New Employment Potentials (Washington: Government 

Printing Office, 1964), pp. 848-855, especially pp. 850-851. 
a 

Paul W. Cherington, "The Interaction of Government and Contractor 
Organizations in Weapons Acquisition" in Richard A. Tybout (ed.), 
Economics of Research and Development (Columbus: Ohio State University 
Press, 1965), pp. 327-343. 

^John Kenneth Galbraith, The New Industrial State (Boston: Houghton 
Mifflin Company, 1966), pp. 317-323. 

11 A detailed treatment of the structure of the defense industry is 
beyond the scope of this study. The standard reference remains Merton 
J. Peck and Frederic M. Scherer, The Weapons Acquisition Process: An 
Economic Analysis (Boston: Harvard University Graduate School of Business 
Administration, 1962). A more recent treatment is found in William L. 
Baldwin, The Structure of the Defense Market, 1955-1964 (Durham, N.C.: 
Duke University Press, 1967). 


47 










ACDA/E-156 





In FY 1968 defense generated employment was estimated at 4.7 million or 
6.1% of total employment. As shown in Table 8, the labor force in 
defense-related employment is generally more skilled than is the overall 
labor force. Somewhat more than one-fifth of defense workers in fiscal 
1968 were in the skilled craftsman category compared with only 13.2 per¬ 
cent in the general labor force. Semiskilled workers and professionals 
employed in defense industries accounted for 26.4 and 14.4 percent of the 
total compared with 18.4 and 12.8 percent, respectively, in the overall 
labor force. The share of clerical employment in defense industries was 
somewhat higher while that of service and sales workers were appreciably 
lower than in the general labor force. 





In particular occupations defense employment represents very large 
proportions of those employed; for example an estimated 59 percent of 
all aeronautical engineers, 54 percent of airplane mechanics, 38 percent 
of non-professor physicists, and 22 percent of electrical engineers. 
Defense work also contributes significantly to the demand for electricians 
and the various metal trades workers. 

When one turns to military personnel it becomes more difficult to 
make occupational comparisons which focus upon skill requirements be¬ 
cause few military jobs have direct civilian counterparts. 

Levels of educational attainment are available and may provide a 
rough proxy for skill. The proportion of military personnel and of those 
in the civilian labor force with high school and college degrees is shown 
for selected years in Table 9. The difference in high school completion 
between the two groups is striking. In recent years four-fifths of en¬ 
listed military personnel had four years of high school compared with 
only about a third of the civilian male labor force. While the mean age 
of servicemen is doubtless lower than that of the civilian labor force 
which would permit the general trend toward more years of schooling to 
register its influence more clearly in the military, the relatively high 
selection standard of the armed services is obvious. Skewness toward 
the younger ages among military personnel and variable deferment 
policies on college students makes it more difficult to interpret the 
data on college graduates. Nevertheless, appreciable reductions in 


The source of all FY 1968 occupational data in this section is Max 
A. Rutzick, "Skills and Location of Defense-Related Workers," Monthly 
Labor Review, Vol. 93, No. 2 (February, 1970), pp. 11-16. 

13 

Wool has estimated that 80 percent of military jobs held by en¬ 
listed men correspond to only about 10 percent of those held by male 
civilian workers. See Harold Wool, The Military Specialist: Skilled 
Manpower for the Armed Services (Baltimore: The Johns Hopkins Press, 
1968), p. 55. 


i 


48 










ACDA/E-156 


military spending and in the size of the armed forces will free better 
educated and more highly skilled persons for work in civilian oriented 
pursuits. 

Whether these persons will have a relatively easy time in trans¬ 
ferring to civilian oriented employment will depend upon the degree of 
transferability of their skills and their individual flexibility. As 
has sometimes been noted, however, the wider availability of such people 
with "desirable” traits and characteristics as viewed by employers may 
only serve to worsen the job outlook for disadvantaged workers lacking 
such skills and training. The issue relates to jjje dependence upon 
credentials as job prerequisites in our society. Clearly, the adjust¬ 
ment problems of all groups will be less difficult in an environment 
of high aggregate demand. 

II.5 RESEARCH AND DEVELOPMENT AND MILITARY SPENDING 

While most of the research and development activities in the United 
States are supported by the Federal government, the proportion of the 
total funded by the government has been declining since the mid-1960 ! s. 
The federally-supported share of totaJ^R & D has fallen from about two- 
thirds in 1964 to 55 percent in 1970. As in prior years, the bulk of 
Federal support in 1970 (82 percent), will come from the Department of 
Defense (DOD), National Aeronautics and Space Administration (NASA), and 
the Atomic Energy Commission (AEC). While still large, this share is 
down almost ten percentage points from the 91 percenj^of total Federal 
support which these three agencies provided in 1960. This shift re¬ 
flects the sharp decline in the NASA research budget and the continued 
growth in the research activities of the Department of Health, Education 
and Welfare (HEW). (See Table 10) One consequence of this shift is the 
swing from research involving machinery and systems to more socially 
oriented study. 


^ See Ivar Berg, Education and Jobs: The Great Training Robbery 
(New York: Praeger, 1970); and M. J. Bowman, "Educational Shortage and 
Excess,” The Canadian Journal of Economics and Political Science, Vol. 

XXIX, No. 4 (November, 1963), pp. 446-461, especially pp. 459-460. See 
also Daniel E. Diamond and Hrach Bedrosian, Industry Hiring Requirements 
and the Employment of Disadvantaged Groups (New York: New York University 
School of Commerce, 1970). 

15, 'Science Resources Studies Highlights,” August 14, 1970, Washington, 
National Science Foundation, NSF 70-28, p. 1. 

16 Ibid., p. 2. 


49 








ACDA/E-156 


The Department of Defense has been described as our "real National 
Science Foundation." In FY 1970 it is expected to provide 49.4 per¬ 
cent ($7.8 billion) of total Federal obligations for R & D. While down 
significantly from its four-fifthjglevel in the early 1950 's and the 
70-75 percent range of 1956-1960, it still is a major patron of science 
and development. When the FY 1970 obligations are broken down into basic 
research, applied research, and development, the DOD supj^rt shares be¬ 
come approximately 11, 36, and 62 percent, respectively. 


Table 11 shows the relative decline in military R & D spending 
since the intensification of Vietnam hostilities and the shifts in its 
regional distribution. Table 12 reflects a similar slowdown in total 
Federal R & D expenditures. The recent pressures on the DOD to postpone 
production until weapons have been more thoroughly tested, the need to 
remedy deficiencies in weapon systems unearthed during the Vietnam 
fighting, the need for more advanced inspection techniques that might 
grow out of the SALT proceedings, and normal modernization requirements 
all suggest that increased military R & D may be anticipated. Research 
spending in the civilian area has also bean restrained during the war 
and will lil;ely grow too. In any event, those sections of the country 
with a comparative advantage in research capabilities will directly 
benefit from enlarged research budgets. The FY 1970 data in Table 11 
suggest that longer term shifts may be underway in the location of mili¬ 
tary R & D with Alaska and Hawaii and the states of the West North Cen¬ 
tral region gaining and those of the Mountain region lagging. 

There seems little reason to fear that a reduction in the role of 
the Pentagon will lead to a gap in R & D expenditures which will be 
difficult to fill. Although advocates of particular research programs 
will have to face increasingly sophisticated review boards. Federal 
support of science is likely to be a fixture on the American scene in 
the foreseeable future. 

Indeed, a cooling off in the rate of growth of military R & D 
may have a salutary effect on civilian research. Nelson has suggested 
that the substitution problem may result in an overstatement of the 

17 Michael D. Reagan, "Science and Politics-Emerging Tensions," 
paper prepared for delivery at the 66th Annual Meeting of the American 
Political Science Association, Los Angeles, California, September 8-12 
1970, p. 10. 

18 

Computed from data in National Science Foundation, Federal Funds 
for Research t Development, and Other Scientific Activities^, Fiscal Years 

1968, 1969, and 1970 , Vol. XVIII (Washington: Government Printing Office 

August, 1969), pp. 248-249. * 

■^NSF 70-28, op. cit., p. 1. 


50 








ACDA/E-156 


20 

real impact of military R & D. That is, military support of research 
may be a substitute for, rather than an addition to non-defense support. 
If this is, in fact, the case, then a withdrawal of DOD research support 
may result in more R & D spending by private firms or other government 
agencies. In addition, it is possible that the high level of military 
R & D in recent years has retarded the growth of civilian R & D by 
bidding up salaries and by absorbing the top science and engineering 
graduates, significantly reducing both the quantity and quality of the 
research effort in civilian laboratories. 

II. 6 MILITARY PROGRAMS AND SOCIAL AND TECHNOLOGICAL INNOVATION 

The DOD may be likened to the perennial iceberg in terms of its 
many little-known functions. Particularly when coupled with heavy 
reliance upon the draft as a source of military manpower needs, the 
military establishment has an impressive but largely unmeasured capacity 
as an engine of social change. The first major application of Federal 
power to combat racial discrimination was President Truman’s desegrega¬ 
tion of the Armed Services twenty years ago. Defense Secretary McNamara 
supported open housing by declaring as off limits those private off base 
housing units whose owners refused to rent to Negro servicemen. 

Ex-Defense Secretary Clark M. Clifford intensified the open-housing 
drive and, in additon initiated broad socio-economic programs in three 
other areas, as follows: 

1. Research is being conducted in new building materials and 
production techniques aimed at lowering housing costs. 

2. Hospital automation in the military is being intensively 
explored to develop lower cost medical care. 

3. New educational techniques are being developed for training 
disadvantaged young men. Under Project 100,000, that number of 
men is taken into the military annually who normally would not 
qualify for military service. They are given special teaching 

to help them qualify for and successfully complet^basic training 
and, if possible acquire simple technical skills. There is also 
Project Transition which is designed to provide job skills for 


20 Richard R. Nelson, "The Impact of Arms Reduction on Research and 
Development," The American Economic Review , Vol. LIII, No. 2 (May, 1963), 
pp. 435-446; especially p. 436. 

21 Ibid., p. 445. 

22 

"Pentagon Widens 'Do-Gooder' Role," Business Week , No. 2041 (Oc¬ 
tober 12, 1968), pp. 79-80. 


51 


r 






ACDA/E-156 


soon-to-be-discharged servicemen 


23 



Social scientists who have noted the use of the armed forces as a 
training and socializing device in the emerging countries have all but 
ignored the process in the United States. Clifford focused attention 
upon this role by revealing in a speech that he was calling for a series 
of proposals from his top assistants "on how we may assist in alleviating 
some of our most pressing domestic problems and how thg^Department of 
Defense should best organize itself for this purpose." He explicitly 
raised the question of whether, in awarding contracts, the Pentagon 
should consider "not only whether the best weapon can be purchased for 
the cheapest price, but also whether the measuremen^of social utility 
should be included in the contract award decision?" The Republican 
Administration appears to have continued some of these efforts. In 
April, 1969, Secretary of Defense Laird announced the establishment of 
a Domestic Action Council "composed of high level officials from the 
Office of the Secretary of Defense, Joint Chiefs of Staff, and Military 
Services to insure a widespread, coordinated approach to the Depart¬ 
ment's domestic action programs." Among other functions it was to pro¬ 
vide communication with the Presidents Urban Affairs Council. Secretary 




Laird emphasized six general areas in which he felt the DOD could help 
resolve domestic problems: procurement (contract set asides for areas 
of concentrated unemployment), manpower (various training programs for 
servicemen and disadvantaged civilians), knowledge transfer (technological 
spillover), assets (disposal of surplus property), community relations, 
and discrimination (various policies to insure equal rights for service¬ 
men) . 




An interagency study group has been established to encourage co¬ 
operation between military and civilian departments in research on common 

23 

For a rather favorable report on Project Transition see "Making 
Civilians Out of Soldiers," Business Week , No. 2143 (September 26, 1970), 
pp. 68-70. 

24 

Possible exceptions are the current Twentieth Centiiry Fund study 
of the impact of the military on American society, directed by Adam 
Yarmolinsky of Harvard Law School, and the work of the Inter-University 
Seminar on Armed Forces and Society at the University of Chicago under 
the direction of the sociologist, Morris Janowitz. 

25 

Speech by Clark M. Clifford to the National Security Industrial 
Association on September 26, 1968, Washington, D.C. 

26 Ibid. 

27 

"Address by Melvin R. Laird, Secretary of Defense at Commencement 
Exercises, St. Leo College, St. Leo, Florida, April 26, 1969," Department 
of Defense News Release No. 321-69, pp. 4 and 5. 


52 











ACDA/E-156 


problem areas. Subcommittees were set up to consider housing, solid 
waste disposal, indicators of civil disorders, law enforcement and 
criminal justice, labor, and rehabilitation of criminals. In March 1969, 
the sixteen DOD-supported Federal Contract Research Centers (RAND, RAC, 
IDA, Mitre Corp. , etc.) were encouraged to devote up to about 20 percent 
of their annual work to non-DOD agencies and Secretary Laird invited the 
heads of civilian departments and agencies to consider utilizing their 
services. 

It is logical to ask why the Defense Department has undertaken these 
tasks. After all, other agencies are charged with area redevelopment, 
housing, health, and job training. The Defense Department has argued 
that its various programs have been designed to assist men in uniform 
and that any by-product consequences are incidental. Nevertheless, the 
impacts of such programs have-been appreciable and, in some cases, more 
successful than programs of the other agencies with specific responsi¬ 
bilities in these substantive areas. 

Perhaps the answer lies in the relative magnitude of the efforts 
which have been mounted, but what this tells us is that national defense 
has been a much more successful rallying cry for increased appropriations 
than area development and a variety of social welfare programs. Perhaps 
some comprehensive form of national service £gn do a more effective job 
of education and training than the military. Several halting efforts 
have been made during the Kennedy and Johnson Administrations, but they 
have failed to spark widespread Congressional support. Unless increased 
support can be developed for these functions to be made the specific 
responsibility of civilian agencies, there is the possibility that a 
reduction in the role of the Pentagon will result in their disappearance 
in the interstices. There is some evidence that this process may have 
begun. For example, during 1969 Senator Mike Mansfield provided an 
amendment to the defense procurement bill designed to reduce DOD support 
of basic scientific research and to shift the funds to the appropriate 
civilian agencies. Recently $8.8 million was cut from the military 
budget and Senator Mansfield attempted to transfer that amount to the 
budget of the National Science F^^ndation. The proposal was defeated 
in the House of Representatives. The unanswered question is whether 
this action will result in a net reduction of that amount in Federal 
support for scientific research. 

^For a recent analysis of the national service alternative see 
Donald J. Eberly (ed.). National Service: A Report of a Conference 
(New York: Russell Sage Foundation, 1968). See also Morris Janowitz, 
’’American Democracy and Military Service,” Trans-action , Vol. IV, No. 54 
(March, 1967), pp. 5-11, 57-59. 

^Behavior Today, Vol. 1, No. 10 (July 6, 1970), p. 60. 


/ 


53 






ACDA/E-156 


There is no a priori reason why such functions cannot be performed 
under the aegis of a civilian agency. Indeed, they may be pressed more 
forcefully by agencies which consider them to be primary missions, 
rather than appendages to the basic military mission. The Columbia 
University sociologist, Amitai Etzioni has proposed the establishment 
of a domestic agency to encourage technological development. Such 
efforts, thus far at least, have received little support in Congress. 


II.7 A COMPARISON OF THE VIETNAM AND KOREAN MOBILIZATIONS 

By almost any measure, the military buildup resulting from the Viet¬ 
nam hostilities has been smaller than that which occurred during the 
Korean War. Examination of the relevant periods in Table 13 shows much 
larger numbers of men inducted in the first period. The highest month 
for military inductions during the Korean War was January, 1951 when 
87,053 men were called. By comparison, during the Vietnam hostilities 
the record month was October, 1966 when 49,481 men were drafted. Fur¬ 
ther, selective service had to begin from a skeleton organization in 
the summer of 1950 as no men were inducted into the armed forces from 
July, 1949 to August, 1950. In the five months between August, 1950 
and the end of the year, almost 220,000 men were drafte^ yielding the 
second largest monthly average in the 1950-1969 period. 

The same rapid and heavy shift to military operations during the 
Korean War vis-a-vis the present hostilities is shown in Table 14. The 
annual rate of Federal purchases of goods and services for national de¬ 
fense increased 41 percent between the fourth quarter of calendar 1950 
and the first quarter of calendar 1951. During the present hostilities 
the largest rate of increase was 8.2 percent between the second and 
third quarters of 1966. 

Table 15 indicates that military manpower jumped by almost 30 per¬ 
cent between the second and third quarters of calendar 1950 compared to 
the maximum of 4.9 percent between the third and fourth quarters of 
calendar 1965. A similar pattern in the growth of civilian employment 
in the Defense Department is shown in Table 16. 

As a result of the more rapid pace of mobilization, the impact on 
price levels was larger and more rapid. Price behavior in the two 
periods may be traced by comparing the implicit price deflators for 


Amitai Etzioni, "Agency for Technological Development for Domestic 
Programs," Science, Vol. 164 (April 4, 1969), pp. 43-50. 

31 

Annual Report of the Director of Selective Service, 1967 , pp. 85- 
86; Semi-Annual Report of the Director of Sele ctive Service, for the 

Period July 1 to December 31, 1967 , p. 37, and Selective Service System, 
Selective Service News , Vol. XX, No. 3 (March, 1970), p. 2. 



54 
























ACDA/E-156 


various components of Gross National Product by quarters for the 1950- 
1954 and 1965-1970 periods. The comparison is striking. The fighting 
began in late June of 1950 and the peak quarterly rate of price advance 
(3.03%) was registered shortly thereafter, between the fourth quarter 
of 1950 and the first quarter'; of 1951. The next highest rate of price 
gain was only 1.28% and was recorded between the third and fourth 
quarters of 1951. In the successive twelve quarters to the end of 1954 
the rate of price change was zero twice, marginally negative twice, and 
did not exceed 1.24%. The sharp climb in early 1951 was paced by price 
increases in consumer goods. During the same period, the prices of goods 
and services purchases by the Federal government increased by only 0.13%. 

The Vietnam hostilities began to escalate in August of 1965. As 
shown in the tables previously referred to, the military buildup was 
more gradual than at the start of the Korean War. The rate of price 
advance was also more moderate and did not reach 1% until the interval 
between the second and third quarters of 1967. However, after that it 
did not climb by less than 0.9% in any interquarter period and consis¬ 
tently attained or exceeded 1% per quarter from the spring of 1968 
through the early fall of 1970. The peak interquarter gain was 
not attained until early 1970 and at that time the gain in consumer 
prices was lagging far behind that for government purchases. In fact 
this pattern has been typical through much of the period. 

There were of course important differences in policy. A price- 
wage freeze order was issued on January 25, 1951 and even before that 
some halting efforts at stabilization had begun. The Korean stabili¬ 
zation program has generally been judged as much less satisfactory than 
that of World War II. Perhaps more important in moderating the in¬ 
flationary pace of prices were t^ three major pieces of tax-raising 
legislation passed in 1950-1951. The delays in requesting and in 
attaining tax increases during the Vietnam conflict stand out in com- . 
parison. Okun has recently presented a detailed account of this period.~ 
In any event the inflationary pressures were permitted to go unchecked 

32 See Gordon F. Bloom and Herbert R. Northrup, Economics of Labor 
Relations (Homewood, Illinois * Richard D. Irwin, 5th Edition, 1965), 
pp. 569-577. 

33 Arthur M. Okun, The Political Economy of Prosperity (Washington: 
The Brookings Institution, 1970), p. 65. 

3 ^Ibid., pp. 62-99. For a review of monetary policy during the 
same period see Darryl R. Francis, "Let's Not Retreat in the Fight 
Against Inflation, 1 * Federal Reserve Bank of St. Louis Review , Vol. 52, 
No. 5 (May, 1970), pp. 7-11. 


55 








ACDA/E-156 


] 


longer in the present situation and the tax surcharge which was finally 
adopted was short-lived and mild. 



The higher level of military preparedness from which we began in 
the Vietnam conflict made it unlikely that the wrenching adjustments 
of the Korean mobilization would be repeated, and it is not unlikely 
that the demobilization after Vietnam will also be smooth. Our ex¬ 
perience with the management of fiscal and monetary policy has grown 
in the interim, and we should be better able to handle the short-term 
problems of transition. In part the conventional nature of the present 
buildup will probably ease the problem since most of the military pro¬ 
curement has been in industries where civilian markets exist, and where 
conversion to servicing such markets should present no great problem. 

An obvious exception will be ammunition plants which have been started 
virtually from scratch in areas relatively remote from urban industrial 
complexes. A special DOD study examined 292 l^or market areas where 
defense dependency was considered significant. Twenty-five of them 
registered a defense dependency ratio of 15 percent or more, and of 
these communities, fifteen were in the "under 25,000 labor force size 
class." The communities with the highest dependency ratios were 
typically dominated by ammunition production. 

A recent study for the Arms Control Agency of an ammunition plant 
in Kansas indicated the work force was relatively uneducatg<^, unskilled, 
and drawn from the lower-paid segments of the labor force. An impor¬ 
tant finding was that in many cases, employment at the plant yielded 
substantially higher earnings which "meant t^g difference between a 
comfortable standard of living and poverty." To the extent that these 
findings of defense worker characteristics may be generalized, they 
suggest that the burden of adjustment to reduced military spending after 


Vernon M. Buehler, "Economic Impact of Defense Programs," in U.S. 
Congress, 90th Congress, 1st Session, Joint Economic Committee, Economic 
Effect of Vietnam Spending, Vol. II (Washington: Government Printing 
Office, 1967), pp. 870-888. The measure of significant dependence on 
defense in a labor market was more than 500 defense-generated workers or 
a defense dependency rate in excess of five percent. 

36 Ibid ., pp. 878-879. 

37 

Bruce W. Macy, Robert E. Roberts and Patricia Quinlan, Ammunition 
Production for Vietnam: Impact on Southeast Kansas ,(Washington! Govern- 
ment Printing Office, ACDA/E-142, February 12,1970), pp. 7-8. 

OQ 

Ibid., p. 8. 


56 


















ACDA/E-156 


peace in Vietnam may fall disproportionately upon minority and other 
disadvantaged workers. However, the fact that many firms currently 
engaged in defense production do have alternative civilian markets sug¬ 
gests that they may be more responsive to expansionary fiscal and mone- 
tary policies than would the major aerospace firms, for example. 

A least as a first approximation, one may speculate that regions 
which have benefited most from the Vietnam buildup will be the most 
vulnerable to an economic decline after its cessation. This will be 
even more likely if emphasis shifts from the general purpose forces 
back to the strategic. Table 17 suggests that such a shift away from 
general purpose forces and toward the strategic has already begun. 

II.8 SOME POSSIBLE LONG-RUN CONSEQUENCES OF MILITARY SPENDING 


The close dealings between the government and its major defense 
contractors noted above have been seen ^ some observers as an important 
step toward rational economic planning. Others have viewed the same 
phenomenon as a distinctly unfavorable development. H. L. Nieburg speaks 
of ”... increasingly irrelevant and meaningless slogans that ignore the 
real issues of monitoring the partnership between government and industry, 
of reforming the gravitation of policy making to the private government 
of industrial organizations whose internal processes are still beyond 
the pale of the Constitution... M and notes that "...strictures of old 
value systems cannot comprehend Nationalization* by govemmen^contract— 
by indirect subsidies, by fiscal management and pump priming." 


Walter Adams, noting that the bulk of defense and space contracts 
are awarded on a negotiated rather than a competitive bid basis, and "as 
much the result of political as economic bargaining," describes a con¬ 
version process whereby the private contractor has been transformed 
into a "quasi-governmental, mercantilist corporation, maintained in a 
privileged position by ’royal* franchise." His list of abuses of this 
entrenched position, citing highlights from a lg£5 report of the 
Comptroller-General, reads like a horror story. 

Tq 

Andrew Shonfield, Modem Capitalism: The Changing Balance of 
Public and Private Power (New York and London: Oxford University Press, 
1965), pp. 341-346, and Galbraith, op.cit ., pp. 314-324, 361-368. 

^°H. L. Nieburg, "Social Control of Innovation,'* American Economic 
Review , Vol. LVIII, No. 2 (May, 1968), pp. 666-677, especially 672-673. 

^Walter Adams, "The Military-Industrial Complex and the New 
Industrial State," American Economic Review , Vol. LVIII, No. 2 (May, 
1968), pp. 652-665, especially 656-657. 


57 


i 


i 









ACDA/E-156 




Professor Adams attempts to distinguish his position from J. K. 
Galbraith*s by explicitly rejecting any ’’technological determinism" and 
by considering the incestuous nature of the military procurement process 
"...a political problem of governmental creation, protection, and sub¬ 
sidization of private privilege.Presumably any reduction in govern¬ 
ment defense expenditures would help slow down, if not reverse, this 
trend toward a position of privilege for the avaricious. 

Murray L. Weidenbaum has expressed a somewhat different concern. 
Rather than private influence in public decision-making his concern is 
with "public assumption of, or active participation in, private decision¬ 
making.”^ sees the procurement of sophisticated weaponry as a pro¬ 
cess which is enervating in nature and a threat to the survival capabili-^ 
ties of the contractor firms. The key aspects of the process are public 
determination of what products the contractor firms will produce; gov¬ 
ernment provision of the bulk of the plant, equipment, and working 
capital used by the contractor firm; and a pervasive assumption of inter¬ 
nal decision-making functions within the contractor firm by the Federal 
government.^ Here, reduced military spending might weaken this un¬ 
healthy dependence upon the government and give these firms a new lease 
on a healthy independent existence. 

Writing elsewhere in this volume, M. L. Weidenbaum notes the lack of 
success of diversification efforts of the major defense contractors and 
their incapacity to market effectively their product in a competitive 
environment or to produce in large volume at low cost. This is relevant 
to their capacity to provide answers to a host of social and environ¬ 
mental problems currently plaguing modem society. The aerospace in¬ 
dustry has spoken confidently of its unique ability to unleash the same 
sophisticated techniques of problem-solving on various urban problems 
which have successfully produced a Polaris missile or a Mach 5 aircraft. 
Some skeptics are unconvinced. It is likely that a real systems break 
occurs when one shifts from physical to social systems which makes more 


^Ibid. # p. 664. 

43 

Murray L. Weidenbaum, "Arms and the American Economy: A Domestic 
Convergence Hypothesis," American Economic Review , Vol. LVIII, No. 2 
(May, 1968), pp. 428-437, especially p. 428. 

^Ibid., p. 664. 


See, for example, the prepared statement of Lockheed Aircraft 
Corporation in U.S. Congress, 88th Congress, 2nd Session, Senate Commit¬ 
tee on Labor and Public Welfare, Subcommittee on Employment and Manpower, 
Nation’s Manpower Revolution, Hearings, Part 9 (Washington: Government 
Printing Office, 1964), pp. 3049-3054. 
















ACDA/E-156 


difficult the effective transfer of skills between the two. Efforts at 
such transfer are underway and it will be some time before final judg¬ 
ments can be safely make. As W. M. Capron has noted, however, imaginative 
changes will be necessary on the demand side of those markets as well 
as among the vendors of these services, if successful applications of 
these techniques to civilian problem areas is likely to occur. 






^William M. Capron, "Discussion" of Weidenbaum paper ( op.cit. ), 
American Economic Review , Vol. LVIII, No. 2 (May, 1968), pp. 438-442, 
especially p. 440. 


59 




FEDERAL PURCHASES OF GOODS AND SERVICES FOR NATIONAL DEFENSE IN BILLIONS 
OF CURRENT DOLLARS AND AS A PERCENT OF VARIOUS AGGREGATES, 1939-1969 


ACDA/E-156 



CO 

w Pm 
CO o 


g 

ZD 

Pu 


CO 

W 


S 


t/J 
w co 


CJ 

M 

£ 

w 

CO 


w 


w 

co 

w 

Cm co 
W < 
Q 


a 

W W 


H 


O 


I 


CO 

Q 

O 

O 

O 

Cm 

O 


> 

o 

o 

hJ 

3 


CO 

U Pm 
CO O 


O 


US 

w o 

CM 


Ed 
co 
S3 
W 
Pm CO 
W *< 
Q 


CO 
CO C4 
W CJ 
CO M 

< > w 

CE P3 CO 

q pa 

co 

£> Pm 

CM pa 

a* 


pa o 

Q O 

pa 

Cm Pm 

O 


*5 

O 

Pm 




OOsfOOOO'NH^COON CO NvOfO^fiO^'J^OHvD CO 


Ncooco-tvooNHcncn on 
r«*r«'*.r^r'**r^.p««.r«.aooooo r>» 


inmoNOor^vomcooNvo vo 

oooooo««oooooooon 00 




rHONCMr^vOONUOrH^rH in <f|^cOCOOrHl^-<tvOCM 


IsoOOOOvOOOHsfsriA 

coco<rcococo*<t<r<t<t 


O NOOHHNiAOnHvON 

<r <j-^ininininmvoinco 



lAOHHnONvONNON VO mcOOvOr^COcOCOCMON CNl 

oooNONQOr^r^oooNONOO oo ONOOONONrHcomo^r o 


COO^NHOCOvCOOON 
• ••••#•••• 

OOOONOOOOHn^ 

r^r^r^vommmmsr^ 

<o- 


00\<MCO\©CNr>*0\vOrH 
• ••••••••• 

vOinsj'0«o»HooincO'd* 


OMONvOm^ncMHO 
vOvOvAvOn0sOvOv0n0vO 
On On On On On O' #n On On On 
HHHHHHHHHH 


ON 

VO 

ON 

H 

I 

O 

vO 

ON 


0) 

00 

<d 

u 

0) 

4 


ON«Nvom^ncMHo 
ininminininmminin 
O' On O' O' O' O' O' O' On 


60 











ACDA/E-156 


<z> 

cn w 
w h w 



</> w 

W CO 

w o <1 


d 

<u 

a 


a 

o 

o 



CO 

W P*4 
CO o 


w 


o 

PCS 


H 

§ 

w o 

W p-i 

co 

Ss < 
w 

pH CO 
W <J 
Q 



cMooooinrHcMcocMr^r'»- 

• •••••••• • 

vO<-CMlT>ONOOOOmHvO 

vO'Pr^ooaxONONONooco 


4^ 

CM On CO *<f CO vO ON ON VO N 

in co vo sr on o on n m in 

n n cn n oo o\oo oo n h 


CMHONHrsvO'OCOHCM 

in^COrsstHHHHCM 

co <f n h 



d •* 

9\ 

d m 

CO 

cd CO 

CO 


a> 

• r\ • 

M 

fH Cl, 

Ot 

1 

oo m a 

o d 

• o 

d 

ON CO o 

a) cd 

i-"- cm 

rH 

<u 

X •» 

X 

Cd r—1 

4-1 

H • 


rH 

o 

* 

u 

t"* 0) 


r". rH 

d 

i—1 X 

0) 

cd 

4-i 

• H 

4-J 

Cu 

•H 

•V 

s 

•> r>- 

CO 

Cv rH 

d 

O 

cd 

C- • 

M 

ON Cl- 

<J* O H 

rH 



oo on * 

*> 

m 4-» 

a) o 

d 

o 

<u 

*H ON 

d 

4-1 rH 


4-4 

CO 

O * 

<D 


M 

00 rH 

pL, 

d d 


*H d 

<U 

4-J w 


d 

4J 

*h r*- 


J-4 

14-1 

CH • 

O 

O 


4-J S3 

co co u 

d 


<D •» 

00 rH O 

i o 

rH Pl 

d m 

0) 

V4 

C* 

0) • 


> rH 

o 

o o 

*H 

pi 

o > 

P 

O 

• • #s 

a 

d co 

o 

O CO 

o 

4-J Q) 

w 

oo d 


d *H 

a 

•H CO 

•H 

x d 


CO PQ 


cd 

u 

a) 

<; 


CO 


rH 

r^- 

m 


r^. 


00 

CM 


CM 

cd 

cd 














• 

4-J 

& 

4-> 


CO 

o 

ON 


CO 

r^- 

ON 

ON 

CO 

<N 


rH 

cd 

V-/ 

d 


rH 

rH 


rH 


00 

I"'- 

<r 

rH 




d 


a> 















o 

u 


</> 












0 


u 














O 

ON 

d 














u 

rH 

u 

• 













4H 



rH 














* 

4-4 

rH 











ON 


d 

So 

o 

• 











<T 


a) 

u 


CO 











ON 


4-J 

cd 

JO 












rH 


d 

d 

<u 

0) 











1 


Pu 

u 

> 

rH 











o 


6 Xi 

u 

X 











<r 


o 

<D 

d 

cd 

on 

00 


vO 

m 

<r 

CO 

CM 

rH 

O 

ON 

ON 

CJ 

Pu 

co 

H 

Hf 

<r 



<* 


or 

<f 

<r 


rH 

CO 





on 

ON 

ON 

ON 

ON 

ON 

ON 

ON 

ON 

ON 


ON 





rH 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

CD 

rH 

• • 














00 


w 





!=> 

o 

CO 


61 










ACDA/E-156 


C\l 

w 

.J 

oq 

< 

H 



2 


2: 

o 

« M 


Q 

til 


H 

< 


Ph 25 


0} cd 

/•"~N /'“N 

cm co 


3 

H 

O 

H 

P-4 

o 

6>2 


c/3 

<3 

*-J 

H 

Z) 

O 


o 

vt 


CO 

<r 


rO 

/"“S 

uo 

m 

<r 


co 


rH O CO CM ON CM ON CO <f 00 M3 M30 --COtHONCMOOCNONOO 


<rm<rcMrHinv£>r^coCTN m 


OOCMHMO^NNON O- 

m m vo vo <X) vd'D m o in 





P3 


cd 

cd 










M2 















00 













/■N 












oc 



25 


rH 

<r 










co 












o 

O 


W 


<o 

CO 










rH 












pH 

r- 


(H 

CO 

o 

co 










o- 













CO 


w 

2 












* 












Q 

rH 


o 

O 

CO 

CO 










00 












z 

s 

C/3 


M 

o>- 

0- 










m 












52 

CO 

P5 


H 

'w' 

'—' 























CO 

< 

<3 

O 

























CO 


25 

25 

CM 

CO 

M3 

rH 

*n 

00 

rH 

O' 


CO 

00 

CO 

r-. 

o 

o 

rH 

M3 

<r 

co 

M3 

<r 

CO 

rH 

<3 

rH 

.-5 

O 


Mf 

CO 

rH 

00 

00 

o*- 

co 

«n 

CO 

oo 

o 

rH 

rH 

M3 

o~* 

<r 

CM 

o 

M3 

O'* 

<r 

o 

CO 

H 


o 

M 

pH 

m 

CO 

m 

O 

o^ 

m 

in 

CM 

O 

CO 

co 

00 

M3 

-O 

CM 

M3 

M3 

co 

CO 

CO 

-o 

o 

CM 

O 

«■» 

Q 

H 

























H 

C/3 


<3 


rH 

o 

o 

o 

M3 

co 

CO 

CM 

rH 

O'* 

m 

CO 

M3 

>3- 

CO 

O 

O 

M3 

o 

CO 

CM 

CO 

CO 


25 


25 


00 

00 

oo 


m 

<r 

m 

in 

m 

<r 

<r 

m 

<r 

<r 


<r 


Mj- 

m 

Mf 

CM 

iH 

CO 


cd co 

/•"v /""S 

CM M3 
m in 
o- m 


M3 

ON 


<t 

oo 


M3 

o<- 

o 

0\ 

o 

CO 


o 

< 

CM 

rH 

CM 

CM 

<r 

rH 

m 

<0 

o 

CM 

o 

M3 

rH 

o 

CO 

O 

o 

CM 

<0 

oo 

00 


O 

w 

H 


o 

M3 

UO 

m 

CO 

00 

rH 

CO 

O 

co 

O'- 

rH 

CM 

CO 

<0 

r- 

O^ 

o- 

o 

m 

rH 

m 

hJ 

O 

CM 

O'- 

00 

CO 

M3 

<r 

m 

co 

00 

00 

CM 

O 

rH 

n- 

Mf 

m 

m 

O'- 

CM 

HT 

o 

M3 

M3 

Ml 

H 
























M 


UO 

CO 

00 

00 

<* 

co 

00 

rH 

M3 

o-. 

CM 

o 

CM 

CM 

ON 

M3 

MT 

0- 

<r 

m 

-cr 

ON 

M3 

% 


co. 

00 

0- 

in 

co 

rH 

rH 

rH 

O 

On 

CO. 

CO 

ON 

00 

M3 

M3 

M3 

M3 


M3 

<r 

CO 

M3 



rH 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

> —1 



rH 













4-1 

CO 

w 


o 

o-. 

co 


4-> 

CO 

w 


0\COtNMDin<fCOMHO 

M3M3M3M3M3M3M3M3M3M3 

OnONOnONOnONONOnOnON 


CO 

M3 

on 

rH 

i 

o 

M3 

CO 


CD 

00 

cd 

u 

0) 

> 

<3 


ON 

m 

co 

rH 

I 

o 

m 


ON 

00 

O'* 

M3 

in 

-cr 

CO 

CM 

rH 

o 

ON 

uo 

m 

m 

m 

m 

m 

in 

m 

m 

m 

rH 

ON 

ON 

ON 

ON 

ON 

ON 

ON 

ON 

os 

ON 


rH 

rH 

iH 

rH 

rH 

rH 

rH 

.H 

rH 

rH 

0) 


oc 

cd 

<u 

> 

<3 


62 










ACDA/E-156 


< 

H 

O 

H 

X 

O 



w 


/*N 

CO 


03 

25 


3 

w 


3 

X 

CO 

CJ 

w 

2 

•H 

Q 

O 

4J 


M 

3 

X 

H 

O 

< 

CJ 

a 

2 


'w' 

O 

3 


M 

Pm 

04 

E-* 


W 

< 


25 


s 



£ 

CO 


3 

H 

3> 

O 

X 

c 

H 

O 

H 


OOHCOvOvOvOCMsvooC 

ONvor^HOMnnn^ 

ONNfOHCNvDHO'Ost 


r"» 

<r 


m 

f"- 

o 


(NHstfOiHvOncOvO 

hhh^oon^m 


m 

oo 


ONoor'-xm<roo<Mi —10 

ONOnONONONOnONCnONON 


I 

o 

Hf 

as 


3 

60 

CO 

X 

<1) 

> 

< 


as 

co 

Os 


x o 
3 <r 
3 m 

e 
3 
x 

3 

> 


O 

25 


X 

3 

3 

e 

c 

X 

0) 

> 


4-J 4-1 

° ° . 

X X “ •* 
COO 
<d 4~> r— 
o Os 








O CD 

O 

CD 

CD 

rH 







O r-i 

o 

4-J 

X 








X 


CO 

•H 

x 

m 

CO 

in 

m 

CM 

f—i 

•• cO 


4-J 

Q 

cO 

• 

• 

• 

• 

• 

• 

3 H 

• • 

CO 


(D 

On 

O 

m 

vO 

m 

Csl 

o 

3 



>■« 

r*. 

1^- 

<r 

rH 

m 

«H 

4-J «■> 

o 

4-J 

#- 







60 

4-i 

3 

N 

rH 







3 O- 

60 

•H 

4-i 

CO 







*H CO 

3 

O 

r—1 

O 







X 

•H 

*“5 

3 

CO 







CO • 

X 


X 

♦H 







co a, 

CO 


CO 

X 







Ds 

CO 

6 









'«-✓ *T3 


o 

• 

X 







3 


X 

CM 

O 







On CO 


4-4 


4-J 


sO 

as 


co 

3 

X 

CO 

4-J 

CO 

T> 

0) 

4-J 

•H 

3 

o 

3 

X 














4-i 

X. CO 

X 

CD 

CD 

CD 


Os 














a 


X 

X 

60 


sO 













4-J 

•* *H 

#k 


X 

X 


as 













O 

X 


CD 


3 


rH 














Os CO 

rH 

X 

4-4 

X 



r>. 

On 

CM 

00 

sO 

on 


sO 

CM 

CM 

rH 

oo 

4-i 

X *H 

sO 

o 

O 



3 

O 

X 

CO 

<r 

rH 

m 

o 


SO 

X 

CO 

in 

O 

ON X 

as 

e 


no 


o 

m 

o 

O 

-<r 


o 

•<r 

O 

CM 

O 

rH 

oo 

cO 

rH (0 

rH 


Jo 

3 


X 

** 

n 

* 



#» 

#i 



#■> 

•V 


Mi 

X 


CD 

X 

3 


3 

on 

CO 

Os 

o 

00 

m 

ON 

•vJ- 

CO 

cn 

o 

oo 

4-i 

CO 

#k 

X 

cO 


• 


CO 

CO 

CO 

sO 

on 

ON 

f"- 

CO 

rH 


m 


CO 

CD 

CD 

CO 

X 

X 

X 

T3 













X 

O rH 

O 


CD 

3 

Q) 

3 













< 

•H CO 

♦H 

CO 

X 

CD 

CO 

CO 














4-4 O 

4-1 

•H 

O 

e 

CO 

3 













X 

4-4 -H 

4-1 

CO 

CD 

<D 

3 














CO 

O M4 

O 

<D 

CO 

60 

O 

r - 













o 

O 


X 


3 

O 

ON 













•H 

60 X 

60 

X 


3 

X 

X 











Os 


X 

C CO 

C 

3 

>> 

3 

X 

On 











<t- 


CO 

•H *H 

•H 

3 

T3 

£ 


tH 











ON 


♦H 

1 1 

x jrj 

X 

X 

CD 


<9s 

1 


cO 

4-J 


m 

CO 


o 

25 

3 

iH 

X 

CO 

H 


Csl 


CO 

3 

X 

cO 

4-J 

CO 

'O 

3 

4-J 

•H 

3 

o 

3 

X 


4-J 

o 


sO 

CO 

I 

r". 

m 

co 

>* 

CO 

3 

•H 

X 

<D 

CO 


Os 


<u 

3 60 
3 X 

X o 
c0 3 

4-J Q 

CO T3 
3 C 
CO 


CO 

4-J 

T—( 

3 

CO 

CD 

X 


cO 

e 

•H 

4-i 

CO 


>> 
x 
3 
<D CO 
cO 


4-J 

3 


CD 

X 


CD 

60 

T3 

3^ 

PQ 

3 

O 


CD H 
O 


H 

X 


•H 

X 


3 
a 3 


CO x 3 X 

3 


3 


•H 


a 



• 

•H 

• • 

CO 

S 

4-4 

CO 

3 


4-1 

3 

X 

T3 

o 

O 

3 

•H 


X 

60 

> 

3 

3 

•H 

3 

X 

O 

X 

Q 

X 


ON 


CO 


c0 


3 

*“) 


cO 


X 

CD 

rH 

CD 

X) 

CO 


CD 

4-> 

CO 

e 


CO 

CD 


O 

X 

as 


co 

<D 

60 

CO 

X 

(D 

> 


63 













Prime Defense Contract Awards, by Area 
(percentage distribution of dollar volume) 


ACDA/E-156 



O 



















r-. 



















ON 


CM 


ON 


o 

m 

m 

00 

<r 

CM 



00 

o 





• 

• 

• 


• 

• 

• 

• 

• 

• 


• 

• 

• 

• 





ON 


NO 


CM 


ON 

CO 

m 

ON 


CM 

«—1 

<r 

o 





rH 

CM 


rH 


rH 

rH 

rH 

CM 



CM 

CM 

o 



£ 
















rH 









































CTn 



















nO 


6^ 











NO 






ON 


CO 

CM 

m 


rH 

CM 

CO 


CO 

O 


00 


O 



4 i— 1 


• 

• 

• 


• 

• 

• 

• 

• 

• 


• 

• 

• 

• 


cd 


o 

1"- 



CO 


o 

CM 

m 

00 


CM 

rH 

<* 

o 


3 

: fc 


rH 

rH 

CM 


rH 


CM 

rH 

rH 

CM 



CM 

CM 

o 

rH 


0 w 

CG 

d 


















4- 

J /-V 


















a) oo 

•H nO 


S'? 













ON 




on 


ON 

O 

ON 


tH 

<r 

m 

O 

r- 



CO 

NO 

o 



rH 


• 

• 

• 


• 

• 

• 

• 

• 

• 


• 

• 

• 

• 





rH 

r- 

00 


CO 


o 

CM 

NO 

00 


CM 

ON 

rH 

o 



iH 


rH 

rH 

CM 


rH 


CM 

rH 

rH 

CM 



rH 

CM 

o 



s 
















rH 









































nO 1 



















nO 



















On 


ON 

\D 

m 


CO 

m 

00 

m 

CM 



vO 

>3- 

o 

o 



rH 


• 

• 

• 


• 

• 

• 

• 

• 

• 


• 

• 

• 

• 





rH 


ON 


m 


CM 

CM 

CM 



CM 

O 

CO 

O 



>-» 


rH 

rH 

CM 


rH 


CM 

rH 

rH 

CM 



CM 

CM 

O 



Pu 
















rH 








































H CM 
CQ nO 


6^ 
















► 

? ON 


On 

r">. 

NO 


NO 

r>- 

CO 

<T 

00 

CM 


r^. 

CM 

ON 

o 


V 

-1 rH 


• 

• 

• 


• 

• 

• 

• 

• 

• 


• 

• 

• 

• 


(1) 


O 

oo 

ON 


CM 

NO 

ON 

O 

r". 

00 


<r 

00 

CM 

o 


44 £h 


rH 

rH 

CM 


rH 


rH 

rH 


rH 



CM 

CO 

o 


d Pn 

1—1 w 
















rH 











„ 









• 

a) 


















o 

cd 

















u 

& CM 

















d 


m 


a-s 















o 

d on 


o 

o 

O 


O 

o 

O 

O 

o 

o 


o 

o 

o 

o 

CO 

CG r—t 


• 

• 

• 


• 

• 

• 

• 

• 

• 


• 

• 

• 

• 


CD 


00 

m 

CO 



c- 


oo 

NO 

<r 


rH 

oo 

ON 

O 

"0 

H 5h 



CM 

CO 


CM 


CO 



rH 



rH 

rH 

O 

d 

C 

D t*. 
















rH 

CO 

& 

2 ^ 



































CO 



















0) 



















44 








rH 

rH 










o 








co 

cG 










d 









U 















o 



4-4 

4-4 










u 








d 

d 


o 








o 





4-1 



(D 

CD 


•H 

rH 







4-4 


43 



d 



CJ 

CJ 


4-1 

cG 









d 


"d 

cG 






d 

U 







<D 


o 


d 

rH 

rH 


-d 

43 

rH 

cG 

44 

rH 




rH 


00 


*H 


cG 

44 

CG 


4J 

4-4 

CG 

rH 

d 

CG 




cG 


cd 


oa 

•• 

rH 

< 

4-» 


H 

u 

4-1 

4-1 

(D 

44 


d 


44 


CD 


o 

4-1 

00 

o 


o 

o 

o 

<1 

CJ 

O 

• • 

•H 

a 

o 

rH 



& 

CO 

d 

CD 

4-4 

• • 

53 

25 

4-1 



44 

44 

cG 

•H 

44 

cG 

44 



cG 

pa 

rH 

40 

4-4 



40 

43 

43 

43 

cn 

44 

4-4 

43 

44 

X 


C/3 

0) 


T) 

d 

CO 

4-1 

4-4 

d 

•• 4-1 

44 

d 

<D 

d 

•H 

d 

O 

0) 


d 

43 

£ 

X) 

C/3 

CD 

CO 

CO 

C/3 

43 d 

d 

CO 


d 

o 

CO 

H 

d 


cn 

4-1 

CD 

•H 


S 

cG 

CD 


44 O 

o 



o 

CG 





d 

M 

2; 

£ 


X> 

w 

55 


d co 

CO 


u 


fX, 



<D 


QJ 

O 




•H 




o 



CG 





0) 


CJ 

525 








CO 



Ph 





CO 


64 

































ACDA/E-156 


XJ 

G 

d 

a 

•H 

M» 

a 

o 

o 


CO 

w 

PQ 

< 

H 


CO 

G 

O 

•H 

Ml 

cd 

o 

o 


XJ 

g 

•H 

CM 

•H 

CO 

CO 

«d 


X> 

a 

Vi 

O 

CM 

U 

G 

a 

a) 






• 




Ml 






•« 



GO 




a 

Mi 





cd 


* 

d 




G 

d 


CO 



Ml 



•H 




Vi 

G 


G 


* 

o 


S 

0 



CU 

Ml 

£ 


G 


X 3 


G 

O 

O 



4 : 

d 

Mi 


d 

G • 

G 

cd 

d 

X 

Po 

e* 


Ml 

0 

u 


•H 

43 CO 

cd 

Q 

Cd • 

G 

3 

g 



Cd 

G 

0 

CO 

Ml G 

rH 


pH G 

rH 


G 


44 


PM 

O 

d 

Ml 

CO 

43 


.X 


O 


O 

<u 

G 

Vi 

« 

d G 

►H 

Mi 

Vl G 

O 

43 

*H 

4 > 


6 

P 35 

4-1 


O Ml 


VI 

d *H 


G 

> 

a\ 

CU 

•H 



G 

CO 

a) 

O 

S GO 

* 

Ml 

Vi 

rH 

0 

V) 


G 

43 

G 

X> 

z 

Vi 

•H 

d> 

G 

1 

*H 

PM 

• • 

Vl 

H 

G G 

o 

• 

* *H 

a 


CO 

CM 

44 


d 

G 


MJ G 

*S 

d •* 

G > 

a 

* 


vO 

VM 

>1 

0 


G 

Ml Ml 

Cm 

•H cd 

•H 

•H 

o 

rH 

CT> 

O 

M 

Ml 

CM 

d 

*H *H 


co jx 

GO Ml 

C 0 

o 

G 

i —1 


G 

go m 

G 

g d 


G co 

Vi CO 

CO 

*H 

a 


G 

Ml 

C 

CTv 


B 33 

cu 

o cd 

O <U 

•H 

X 

*H 

CO 

C 

•H 

*H 

»H 

C 0 

0 

Vi 

a u 

G ^ 

CO 

g • 

Ml 

Vi 

G 

pH 

43 


Ml 

CJ G 

•H 

C 0 43 

O 

CO 

X *H 

CO 

G 


•H 

CO 

Vi 

O 

43 

43 

•h <u 

* 

•H 

•H 

•H 

CU 

•* 0k 

s 

G 

G 

G 

G Ml 

CO 

3 23 

•* G 

se 

£ G 

Ml 

>4 

pH 


DC 

G 

&• td 

9 « 


G *H 


cu £ 

G 


• 

A 


Gh 

B 4-1 

6 

a #> 

G G 

* 

5 S G 

Ml 

pH 

CM 

CO 



M 

0 

cd 

O -H 

•H *H 

G 

33 

CO 

G 


G 


rH 



33 

• *H M 

Vl GO 

d 

* 


O 


O 

0 

G 

O 

43 G 


a) 

ss 


co 

44 

44 

G 

CO 

43 

CJ 

<d 

co 


<d,c 3 
*H O O 
G co 
cd •» co 
> G *H 

«h <d £ 

>» GO 
CO *H • 
d 43 G 

d o 

£2 


o u cd 


4M 

M 


Ml 
O 
CO 

g 
d 
cd c 


PH 


cd 

•H 

1 


> CO 
•H 
** d 
cd o 
c -i 


o Po 

rH V ^ 
O Cd O 
Cd Cd 3 

44 

X c 

O 44 Qj 


Cd X3 
X) d 
G G 
> 

a) cd 

CO 
* cd 
cd t—( 
d <J 
cd 

44 r 

d d 
o o 

E m> 
GO 


Vl CO 
O *H 
44 Pm 


a) 

Ml 

cd 

4 -J 


g 

44 

cd 
u 
o 

M CO 

o 

0) XJ 
Vi d 
•H cd 
O 




G 


O 

c 3 

a 



d 

04 


* 

d 

0k 

O 

!£ 

CO 

G 

CSI 


CM 43 

O 


G 


>-• 

*H 



Ml 

0 



O 

•H 

G 

•H 

O 


M 

1 


G 

Cd 

Ml 


X 



G 


• 

O 

CO 

r» 


43 

43 

G 

00 


>4 

G 

tH 

a • 

CM 







d 

G 

G 

•H 


G 

• 

G 

G 

d 


0k 

O 

G 


B 


#1 


• • 



G 

M 

G 

Ml 

Vi 

0k 

G 

G 

TJ 

G 

G 

P 3 

G 

44 

>-• 

• 

G 

G 

B 

Vi 

® 

G 


5 Z 


G 

O 

Ml 

G 

G 

G 

M 

5 

44 


G 



CM 

d 


G 

O 

d 

d 




d 

rX 

G 

d 

d 

X 



G 

>> 

d 

G 

rH 

CM 

Ml 

0k 

d 

5 

0 

•H 



CO 

G 

G 

•H 

*H 

G 

G 


* 

Q 

43 

G 

44 

G 


G 

vO 

44 


*H 

G 




O 

Q 

rH 

44 

H 

O 

d 



44 

G 

O 

0k 

•H 


G 

Vi 

00 

X 


G 

0 




O 

Vl 


X) 

0 

4-1 

G 


Vl 

G 

y—s 

> 

• 

•H 

O 

G 



G 

d 

0k 

43 

#\ 

u 

<J 

0k 

G 

00 

O 

X) 

O 

0 

•H 



CM > 

4-1 


Ml 


Vi 

•H 

G 

Ml 

G 

G 


G 

Vi 

G 


Vi 


Ml 

Pm 

0 

d 





d 


G 

rH 


d 

Vi 

U 

#1 

G 

O 

Vi 


G 

44 

0 

• • 

r^ 

•H 

0k 

d 

G 

G 

0 


G 

pH 

O 

0 

G 


G 

G 

rH 

0 

Vi 


O 

G 

G 

CTN 



•H 

d 

d 

*H 

• 


(H 

M 

CO 

S 

43 

B 

G 

O 


G 

<3 


Vi 

Ml 

rH 

G 

vO 


t —4 

G 

Ml 

Ml 

3 c 




G 

Ml 

G 

G 

Cd 

0k 

Ml 


MJ 

•H 

G 


O 

CTv 

G 

05 

d 

O 

d 

G 




rH 

u 

43 

d 



G 

Ml 

d 

O 

MJ 

0k 

G 

rH 

CJ 

> 

G 

G 

0 

23 

• • 

• • 


G 

0 

G 

d 

0k 


Vi 

CJ 

G 


CO 

O 

G 


G 


O 

d 

0 


G 

rH 


O 

23 

iH 

G 

G 

d 

O 

G 

B 

0k 


CO 

PM 


G 

Vi 


d 

C 


G 

G 




< 

H 

d 

C 

G 

Vi 

Ml 

G 

XJ 



V 

PM 

G 

d 

0 

G 

• • 

U 

Vi 






0 

0 

CO 

Mi 

Vl 

G 

d 

V 


G 


rH 

•H 


> 

O 

Ml 

Ml 


• * 




N 

4-1 


d 

G 

d 

G 

G 

0k 

r£ 

44 

rH 




*H 

d 

d 


O 


• • 


•H 

•H 

G 

0 

PM 

G 


43 

§ 

B 

0 

O 

G 



M> 

G 

G 


•H 


rH 


Vl 

r —1 

43 

Cd 

G 

44 

d 

O 

d 

G 


G 

G 

• * 


d 

O 

u 


Ml 


G 


<J 

G 

Ml 


Q 

G 

0 

Ml 

G 

Ml 

44 


G 

G 


G 




d 


Vi 



Cd 


G 


O 

•H 

CJ 

-C 

CM 

CJ 

G 

d 

d 


rH 

43 

43 


G 


Ml 




4-1 

B 



00 

O 

d 

G 

G 

43 

rH 

G 


Ml 

Ml 

Ml 




d 


• • 


O 

•H 

• • 

44 



G 

CO 

CM 

Ml 

O 

rH 


< 

Vi 

Vi 


Ml 


G 


d 

• • 


Vl 

d 

O 

Pi 

0k 

XI 


B 


d 

00 



O 

0 


<J 


CJ 


•H 

CJ 

G 

CM 

0 



G 

•H 


w 

CO 

•H 

d 


G 

23 

23 






G 

•H 

O 


4-1 

Pn 

>> 

G 

G 

*k 


G 


W 


tH 




43 


43 


Ml 

4-1 

•H 

f 5 ^ 

00 

V 

PQ 

d 


G 

0 

G 

G 



G 

Ml 

Ml 


Ml 


Ml 


d 

•H 

4-1 

U 

d 

G 


G 


G 

•H 

d 

G 

> 


G 

G 

G 


d 


d 


d 

O 

4 H 

G 


44 

G 

44 

>•> 

d 

B 

tH 

Ml 

G 


•H 

G 

G 


0 


0 


0 

G 

O 

Ml 

43 

G 

X> 

G 

G 

0 

O 

U 

G 

Z 


X 

W 

z 


CO 


CO 


a 

PM 


*H 

G 

u 

Vl 

O 

U 

CM 

d 

X 

Ml 














rH 

G 

0 

G 


u 

G 

0 

w 

CO 













• • 

•H 

5 

G 

£ 

44 

d 

G 

a 

G 

43 













G 

X 

V 4 

CO 

< 

0 

a 

CM 

PM 


/-■■* *H 0 - 
> On 
\D M H 
CTv G 
pH CO * 
ON 

•» »—| vO 
N (6 d\ 
CM U H 
•H 

P U *• 

a) co oo 

jo h vo 
e M on 
<D cd tH 

CJ 4_> 


o 

co 

•H 

Pm 

Vi 

O 

44 

cd 

M> 

cd 

Q 


•H O 
B T) M 

o g g 
d d i 
o o B 
a *h o 
w co o 
CO 

0) rl H 

rH B O 


H C Vl 
GOG 

u 'i 


CO 

o 


Vi 

d 

o 

CO 


65 





Military Prime Contract Awards of $10,000 or More for Major Military 

Hard Goods — by Geographic Region 


ACDA/E-156 


o 

1 — 

6-2 

o 

r- 

rH 

c- 

sO 

CM 

r- 

O O 


6-2 

O 

O 

00 

SO 

so 

rH 

o 

rH 

00 


OS 

r—i 

o 

CO 


os 

o 

n 

<r 

rH rH 

HC 

• 

O 

• 

CM 

• 

CM 

• 

CM 

• 

CM 

• 

o 

• 

CM 

• 

sO 

• 

iH 

HC 


o 

rH 

rH 


rH 

rH 

CM 

rH 


o 

rH 

rH 



rH 



m 


>-• 

rH 









rH 










pt-i 




















Os 

S-2 









5-2 










s£> 

O 


rH 

00 

o 

CO 

o 

i"- os 


O 

00 

00 

CO 

CM 

rH 

CO 

00 

sO 


On 

• 

• 

• 

• 

• 

• 

• 

• • 

* 









• 

•K 

rH 

o 

in 

rH 

CO 

Os 

CM 

uo 

O rH 


O 

CM 

CO 

CM 

CM 

OS 

CM 

uo 

rH 



o 

rH 

rH 

rH 


rH 

CM 

rH 


O 

rH 

rH 






U0 


£ 

rH 









rH 










00 

5-2 









5-2 










s£> 

O 

sO 

rH 

CM 

rH 

CM 

n* 

00 <3" 


O 

r-. 

rH 

o 

O 


Os 

CO 

rH 


O' 









HC 











t-H 

o 

00 

CO 

rH 

os 

O 

so 

o o 


O 

rH 

rH 

<* 

CO 

o 

CM 

uo 

rH 

O 


o 

rH 

rH 

rH 


rH 

CM 

rH 


O 

rH 

rH 



rH 



UO 


>* 

rH 









rH 










Pm 





















6-2 









6-2 










i—1 sO 

O 

CM 

sO 

sO 

o 

sO 

rH 

OS o 


O 

CM 

CM 

sO 

in 

r-^ 

CM 

OS 

OS 


cd os 









* 










HC 

4-i t-H 

O 

m 

CnI 

O 

os 

O 

rH 

o o 


O 

O 

O 

<1- 

CM 

Os 

CO 

so 

CM 


O 

O 

rH 

rH 

rH 

rH 

rH 

CM 

rH 


O 

rH 

rH 






U0 


H £ 

rH 









rH 










e 




















cd 




















Pi sO 

S'? 









5-2 










00 sD 

o 

Os 

uo 

rH 

<1- 

OS 

o 

CO os 


O 

i"- 

rH 

r-. 

n 

00 

O 

uo 

r- 


O O'* 

• 








* 










HC 

M i— 

o 

o 

o- 

CO 

rH 

00 


rH CM 


O 

Os 

CM 

CO 

-a- 

rH 

CO 

VO 

00 



O 

CM 

rH 

rH 

rH 


rH 

r—I 


O 


rH 



rH 






rH 









rH 










4M PM 




















O 




















4J m 

6-2 









6-2 










G o> 

O 

c*. 

CN 

in 

Os 

<r 

in 

OS 00 

rH 

O 

rH 

r-» 

in 

00 

00 

rH 

00 

CM 


CL) O'. 

• 

• 

• 

• 

• 

• 

• 

• • 

• 










HC 

O r- 

o 

<T 

-cf 

o 

I"'* 

o 


O so 

O 

O 

Os 

rH 


CM 

O 

CO 

r^. 

o 


P-! 

o 

rH 

rH 

rH 

rH 

rH 

rH 

rH 


o 


rH 



rH 



U0 


CD >M 

rH 









rH 










Pm Pm 




















■<r 

6-2 









5-2 










sD 

o 

m 

s£> 

<r 

CM 


OS 

uo <* 

rH 

O 

rH 

sO 

in 

rH 

CM 

CM 

CM 

rH 


os 



















HC 

I- 

o 

CM 

CO 

CM 

CM 

00 

rH 

O 00 

d 

O 

00 

os 

co 

CO 

O 

CO 

rH 

rH 



o 

rH 

rH 

rH 

CM 


rH 

rH 


O 





rH 


rH 

UO 


£ 

rH 









rH 










ro 

5-2 









6-2 










40 

O 

r-. 

O'* 

OS 

r^. 

sO 

CM 

OS rH 


O 

CO 

SO 

CM 

U0 

CM 

CM 

CO 

r-* 


Os 









HC 










HC 

rH 

O 

CO 

C- 

sO 

CO 

r"» 

O 

O os 


O 

sO 

Os 

CO 

CM 

00 

CM 


co 



O 

rH 

rH 

rH 

rH 


rH 

rH 


O 







rH 

uo 


>•< 

r— 









rH 










Pm 




















CM 

6-2 









6-2 










sD 

o 

r-. 

CO 

00 

rH 

O 

UO 

SO O 


O 

o 

sO 

oo 

oo 

Os 

CO 

OS 

r- 


Os 









HC 










HC 

rH 

o 

00 

O 

CM 

CM 

sO 

r-. 

O CM 


o 

00 

o 

CO 

rH 

oo 

rH 

rH 

co 



o 

rH 

CnI 

rH 

rH 



CM 


o 


rH 





rH 

uo 



r— 









rH 










Pm 





















id id 


cd id 









V-i 








C/D 



u 

V4 









o 

X) 

u 








2 


o 

4J 

4-1 




T3 




T3 

*H 

G 

G 

o 






Q 

w 

H3 

•H 

G 

G 

o 



G 

o 



G 

4-4 

0) 

<U 

•H 

rH 





z 

H 

G 

4-1 

0) 

(U 

•H 

rH 


cd 

•H 



cd 

G 

cj 

O 


cd 






C/D 

cd 

G 

CJ 

CJ 

4-1 

cd 



JO 


H 

rH 

cd 



G 

U 

G 


*-<3 

•H 


>"• 

rH 

cd 



G 

u 

G 

& 

CX 


p-t 

00 rH 

• 

• 

cd 

4-1 

*H 

o 


•H 

w 

C/D 

00 rH 

• 

• 

cd 

4-4 

*H 

cd 

cd 


< 

G 

u 

2 

2 

rH 

G 

cd 

•H 

cd 

cd 

hJ 


C 

4-» 

2 

2 

rH 

G 

Cd 

H 

u 


w 

w 

<2 



4J 

CD 

4-* 

44 



IH 

W 

w 

<2 



4J 

d> 

4-4 

00 

00 

cd 

u 


l 

4-> 

u 

<2 

U 

G 

♦H 

CO 

Cd 

C/D 

CJ 


1 

4-1 

4J 

<2 

U 

G 

O 

o 

0) 

P4 



CO 

CO 



3 

CJ 

cd 

2 

C/D 

<2 

£ 

T3 

CO 

CO 



3 

U 

0> 

M 

M 

d> 

■H 

cd 

0) 

• 

• 

O 

cd 

rH 


M 

PX 


*H 

cd 

d) 

• 

• 

o 

P-. 

o 

<2 

<2 

2 

2 

w 

22 

cn 

CO 

2 

PP 

<2 


2 

m 

2 

2 

w 


in 

C/D 

2 


I 


66 


Pacific 
Alaska & 
Hawaii 





















TABLE 4 (continued) 


ACDA/E-156 


o 

H 

I 


u 

Put 


O 

U 


cd cd 

U 4J 


o 

8*1 




















O 

o 

00 


CM 

00 

m 

rH 

ON 

CM 

o 

m 

ON 

m 

ON 

U0 

uo 

CM 

ON 

on 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 










rH 

o 

00 

00 

CM 

o 


NO 

o 

00 

O 

o 1 

rH 



rH 

r-» 

CM 

o 

NO 


o 


CM 



CM 

CM 




o 









£ 

»H 










rH 









on 

8 * 



















vO 

o 

m 

NO 

NO 

CM 

NO 

CO 

CM 

o 

rH 

Ol 

00 

rH 

NO 

NO 

CO 

rH 

CO 

o 

On 

• 



















rH 

o 

m 

ON 

<r 

O 

00 

ON 

O 


d 

o 

«H 

vO 

r>. 

rH 

UO 

NO 

o 

I- 1 


o 

rH 

CM 



CM 



rH 


o 



NO 





rH 

E 

rH 










rH 









00 

8 * 










8 * 









vO 

o 

CM 

<r 

rH 

NO 

CM 

m 


UO 


o 

<r 

CM 

ON 

<r 

00 

CO 

n- 

CO 

ON 

• 

• 

• 

• 

• 

• 

• 

* 

• 

• 










H 

o 

LO 

ON 

m 

o 

ON 



CM 

o 

o 1 

iH 

NO 

00 

CM 

o 

U0 

O 



o 

CM 

rH 



rH 

iH 


rH 


o 



NO 


rH 




£ 

rH 










rH 









r>. 

8 * 










8 * 









vO 

o 

rH 

CM 


CO 

NO 

m 


U0 


O 

CO 

rH 

CM 

r-. 

CM 

rH 

<r 

ON 

ON 

• 







* 

• 

* 










H 

o 

00 


VO 

o 

ON 

CO 




o 

CM 

ON 

00 

CM 



o 

m 


© 

rH 

rH 



rH 

rH 


CM 


o 



NO 






E 

rH 










rH 









vO 











8 * 









vO 

O 


CM 

m 


CM 

NO 

CM 

<3- 

rH 

o 

CO 

rH 

NO 

o 

ON 


CM 

CM 

ON 

• 



















*H 

Oj 

<r 


n- 

o 

ON 

NO 

O 

r>* 

o 

o 

rH 


uo 

CM 


CO 

o 

CM 


o 

CM 

CM 



rH 



rH 


o 



r-. 






E 

rH 










rH 









m 

s* 










8 * 









NO 

o 

NO 

n* 

<r 

CO 

r^. 

rH 

rH 

O 

rH 

o 

uo 

rH 

m 

rH 

ON 

o 

CO 

NO 

ON 




















rH 

ol 


co 

CO 

o 


rH 

O 

NO 

d 

O 

o 

00 

uo 

CM 


CO 

o 

CM 


o 

CM 

rH 



rH 

rH 


CM 


O 









E 

rH 









! 

rH 









<r 

8 * 










&* 









vO 

o 

o 

ON 

CM 

rH 

00 

CO 

rH 

NO 


o 

<3- 

r-» 

uo 

CM 

O 

00 

CM 

CM 

ON 

• 

• 

• 

• 

• 

• 

4 

• 

• 

* 









• 

rH 

o 

00 

o 

NO 

o 

iH 

uo 

o 



o 1 

O 

-3- 

CO 

rH 


CO 

o 

ON 


o 

«H 

CM 



CO 



rH 


o 



f'-. 






E 

rH 










iH 









co 

S'? 










8 * 









NO 

o 

VO 

00 

o 

CO 

r». 

CO 


CO 

o 

o 

NO 

<r 

UO 

00 


o 

UO 

U0 

ON 




















rH 

ol 

ON 

ON 

NO 

o 

ON 

o 



d 

d 

o 

CM 

CM 

o 


CO 

O 

00 


o 

rH 

CM 



rH 

rH 


rH 


o 





H 




E 

rH 










rH 









CM 

8 * 










8 * 









NO 

o 

<r 

CO 

CM 


r>* 

ON 


00 


o 

uo 

O 

oo 

ON 

CM 

uo 

CO 

00 

ON 

• 







* 

• 

* 










rH 

o 

l/N 

to 

NO 

O 

00 



m 


d 

o 

ON 

r>- 

o 

in 

CO 

o 

CM 


o 

CM 

CM 



rH 



iH 


O 



NO 





rH 

E 

rH 










rH 










cd cd 
m u 

4-5 4-5 


T3 




XJ 

•H 

d 

a 

o 







T3 

•H 

d 

d 

u 






a 

o 



c 

4-5 

<0 

0) 

•H 

rH 





w 

d 

4-1 

cu 

0» 

•H 

rH 





cd 

•H 



cd 

C 

u 

u 

4-5 

cd 





> 

cd 

d 

CJ> 

u 

4-1 

cd 








rH 

cd 



C 

U 

d 


*4J 

•H 

5H 

rH 

cd 



c 

U 

d 


^3 

•H 

B 

Cu 



00 

rH 

• 

• 

cd 

4-5 

•H 

o 


•H 

H 

00 

rH 

• 

• 

cd 

4-5 

•H 

o 


•H 

cd 

cd 



d 

4-5 

z 

z 

rH 

d 

cd 

•H 

cd 

cd 

o 

d 

4-5 

2 

z 

rH 

C 

cd 

•H 

cd 

cd 

u 

u 


CO 

w 

<3 



4-5 

Q) 

4-5 

IH 


£ 

i a 

W 

<3 



4-5 

CU 

4-5 

MH 


£ 

00 

00 

cd 

CU 


1 

4-5 

4-5 

<3 

O 

d 

*H 

(0 

cd 

& o 


l 

4-5 

4-5 

<3 

U 

d 

•H 

CO 

cd 

o 

o 

0) 

IH 


T3 

CO 

CO 



0 

O 

cd 

z 

Z H 

S 

TJ 

CO 

CO 



d 

O 

cd 

Z 

u 

(U 

u 

z 

<u 

•H 

Cd 

<1) 

• 

• 

o 

cd 

*H 


<3 P 

<D 

•H 

cd 

CU 

• 

• 

o 

cd 

rH 


PH 

o 

<\ 

CO 

z 

a 

M 

z 

CO 

CO 

Z 

(U 

<3 


H <3 

2 

a 

w 

Z 

CO 

CO 

a 

PH 

<3 



67 


0.1 





















TABLE 4 (continued) 


ACDA/E-156 



o 

&^5 










SM? 







in 

vO 



h- 

O 

CO 

vO 

m 

m 

>3- 

CO 

vO 


o 

o 

CM 

co 

CM 

oo 

vO 

00 

o 


on 

rH 

O 

o 


CO 

CO 

<* 

CO 

o 

Os 

o 

o 


CM 

»n 

rH 

vO 

ON 

rH 

00 

• 

o 



O 

CO 

rH 

rH 

rH 




rH 


o 


rH 

CM 

CM 


rH 





E 

rH 










rH 











ON 

sv° 










s-s 







VO 

in 



vD 

o 

m 

rH 

MO 

<f 


CO 

00 

VO 

o 

o 

n- 

«H 

I-"- 

CM 

in 




on 

















CM 



•K 


rH 

o 

m 

m 

O 

CM 

co 


rH 

vO 

o 

dj 

m 

m 

rH 

00 

m 

rH 

ON 




o 

CO 

rH 

rH 

rH 




rH 


o 


rH 

CM 

rH 


CM 





>-• 

rH 










rH 











PM 






















00 











S'S 











vD 

O 

m 

vO 

o 

00 

00 


00 

r- 

o 

O 

m 

o 

r-- 

OS 

CM 

rH 

rH 




On 

• 


















oo 

•K 


pH 

o 

<r 

oo 

m 


co 

co 

O 

m 

d 

d| 

m 

CO 

o 

Os 

vO 

m 

?H 




o 

CO 

rH 

iH 





rH 


o 


rH 

CM 

rH 


CM 





JH 

rH 










rH 











ft| 

































s^ 










rH 

vD 

o 

oo 

ON 

00 


CM 

CO 

Mt 

CM 

o 

Oj 

CO 

CM 

Os 

CM 

rH 

vO 

CM 

vO 


cd 

On 




















•K 

•u 

rH 

o 

m 

00 

CM 

CM 


m 

rH 

Os 

o 

o 


O 

00 

CM 

r^. 


rH 

rH 


o 


o 

CM 

rH 

rH 

rH 




rH 


o 


rH 

rH 

CM 


CM 


rH 


H 

>» 

rH 










rH 











P-4 





















e 






















cd 






















u 

vjD 

sc 




















oo vo 

o 

rH 

co 

in 

CM 

CO 

r- 

o 

Os 

o 

O 

on 

VO 


<J- 

oo 

r^. 

ON 

o 

O 

o 

O'. 





















h 

rH 

o 

n 

v£> 


00 

CO 

<r 

rH 

<T 

o 

O 

VO 

CO 

o 

VO 

m 

n- 

O 

00 

O 

CH 


o 

CO 

rH 

rH 





rH 


O 


rH 

CM 

rH 


rH 


rH 


►< 

rH 










rH 










4-1 

pH 





















O 






















H 

m 

&c 










8^ 










g 

vO 

o 

<f 

CM 

<r 

rH 

o 

00 

CO 

00 

o 

O 


CO 

O 

ON 

ON 

vO 

o 

ON 

o 

<D 

c\ 





















a 

rH 

o 

Mf 

m 

CO 

pH 

vO 

CO 

o 

m 

o 

o| 

00 

CO 

00 

CM 

o 

CM 

rH 

CM 

o 

h 


o 

rH 

CM 

rH 

CM 




rH 


o 


«H 

H 

rH 

rH 

rH 


CM 


CD 

s* 

rH 










rH 










CH 

Pm 






















<r 

5C 










S^ 











vo 

O 


CO 

o 

rH 

ON 


CO 

CO 

o 

o 

Os 

co 

o 

o 

ON 

m 

o 

ON 

o 


on 

• 

• 

4 

• 

• 

• 

• 

• 

• 

• 

• 

4 

• 

• 

• 

* 

• 

• 

« 

• 


rH 

o 

o 

CO 

vD 

m 



o 

m 

o 

O 

Os 

CM 

rH 


vO 

m 

rH 

m 

o 



o 

CM 

co 

rH 





rH 


O 


rH 

CM 

rH 


rH 


rH 



E 

rH 










*H 











ro 

SC 










S'S 











VXD 

o 

CM 

o 

MT 

vO 

ON 

CM 

o 


o 

O 

MD 

vO 

00 

?H 

m 


vO 


o 


on 






















pH 

o 

Mf 

ON 

m 


sO 

CO 

rH 

CM 

d 

O 

m 

00 

o 

o 

CM 

<r 

O 


o 



o 

CM 

rH 

CM 





rH 


O 



CM 

CM 

rH 

rH 


rH 




rH 










rH 











PH 






















CM 

SC 










&>$ 











vO 

O 

CO 

pH 

CM 

rH 

Os 

rH 

CM 

rH 

o 

o 

m 

00 

rH 

*<}■ 

CO 

rH 



o 


ON 




















• 


rH 

o 

r>. 

C'- 

CM 

CO 

CM 

<r 

O 

CO 

o 

o 

vO 

os 

o 

rH 

ON 

m 

o 

r-". 

o 



o 

oo 

rH 

CM 





rH 


o 



CM 

CM 


pH 


rH 



pM 






G g 








u 

u 












a 

H 

H 







TJ 





•H 

G 

G 

o 






G 

o 



G 

4-» 

(D 

CD 

•H 

rH 





cd 

•H 



cd 

G 

O 

CJ 

U 

G 






X 



rH 

cd 



G 

M 

G 




e 

Cu 


C/3 

00 rH 

• 

• 

cd 

H 

•H 

a 


•H 

cd 

cd 


55 

G 

4J 


55 

rH 

G 

cd 

•H 

cd 

G 

u 

u 


O 

w 

c 



■U 

<D 

•u 

4-1 

M 


00 

oo 

cd 

pu, 


1 

•u 

4-» 

< 

O 

G 

•H 

cn 

G 

o 

o 

CD 



"O 

03 

CO 



G 

O 

G 

PC 

u 

cu 

U 

Pm 

CD 


cd 

(D 

• 

• 

O 

cd 

rH 


PU 

a 

< 

£2 

2 

£ 

w 


CO 

CO 

£ 

CH 

•5 



55 

o 

M 

H 

M 

55 



O 

'O -H 
G 4J 
G G 
rH 03 
00 rH 
G 4J 
w <J 
I 

£ T3 
0) *H 
£ £ 


o3 G 


u 








4J 

4J 







G 

G 

a 






<D 

CD 

•H 

rH 





O 

CJ 

4J 

G 





G 

V4 

G 


c3 

•H 

• 

• 

G 

4J 

•H 

o 


•H 



rH 

G 

G 

•H 

G 

G 



4-> 

G 

4-1 

4-4 


£ 

4J 

u 

<d 

O 

c 

•H 

0) 

G 

w 

V) 



G 

a 

G 

35 

G 

w 

CD 

• 

CO 

• 

CO 

O 

£ 

G 

Pc 

5! 






68 



























TABLE 4 (continued) 


ACDA/E-156 


4J 

h ^ 

U VO 
CsO vO 
O ON 
M H 
PH 

-«E 

O 


o 











rs. 

ON 

O 

NO 

rs 

CM 

<1- 


m 

m 

<r 

O 

iH 

o 

CM 

CM 

00 


r>. 


CM 

co 

rH 


o 

rH 

CM 



rH 



CM 


E 

*H 










ON 




• 







NO 

O 

rH 

st 

rH 

m 

00 

in 

st 

NO 


On 

• 

• 

» 

• 

• 

• 

• 

• 

• 

• 

rH 

o 

CM 

m 

rH 

m 

St 

NO 

CM 

rH 

o 


o 

rH 

CM 

rH 


rH 



CM 


E 

rH 










00 











NO 

O 

ON 

m 

co 

00 

rH 

St 

r- 

ON 

Mf 

ON 











rH 

o 

co 

r". 

O Ml* 

co 

NO 

CM 

o 

O 


o 

rH 

CM 

rH 


rH 



CM 


E 

rH 











S'? 










NO 

o 

*H 

co 

r>* 

NO 

CM 

co 

o 

in 

co 

ON 











rH 

o 

co 

r-s 

ON 

m 

m 

m 

CM 

rH 

o 


o 

rH 

cm 



rH 



CM 



VI 

£3 


m 

NO 


o 


o 

o 




moNnooHoonn 


HO\O'O<Tv0N00 

H N rH r-4 H 


OMTiHOvO^'sTO'O 


to 

u 


d 

o 

o 


d 

55 X) 

d 

•* *H CsO 
CO Xi d 
a) co 
o cd 


•H ^ 
> ^ 
M 

<U r^ 
co NO 
ON 
«H rH 
<d \ 
O CM 
•H vO 
•U ON 
CO i—I 
*H 


4-> 

cd 


CO 

v» 
u cd 
CO 0) 


u 

O iH 
4-i td 

o 

05 CO 
4-> «H 

cd b 

u 

Q 
u 
o 
0 ) 

Vl 


0 ) 

4J 



d) 

ON 














•H 4J 

On 

/S 


o 


O 

rH 



o 

CM 

CM 

O 

m 

rH 

CO 

CM 

rH 

o 


Q co 

rH 

On 


4-J 


Vi 




o 

rH 

CO 

rH 


rH 



CM 





NO 




Q) 




rH 











* *d 


On 




(U 















d) d 

n- 

iH 


Vi 

















co TO 

CM 



O 






5^ 











d 




> 



Sf 













<u ps 

Vl 






NO 



O 

m 

st 

m 

00 

00 

NO 

rH 

CO 

o 


4H O 

dJ 

CM 


VI 



ON 














<U *Hj 

•§ 



o 



rH 



o 

ON 

m 

o 

CO 

CM 


CO 

ON 

rH 


Q bC 

Vi 


44 




0 


o 


CO 

rH 


rH 



iH 



44 ^ 

<d 

d> 








rH 











a 

Xi 


to 



hi 














O 

CD 

o 


d 


















Q 

4-J 


rH 

















E-° 


O 


TO 



co 



8H> 











•n 

o 


> 



NO 



O 

vO 

«n 



00 

st 

CO 

ON 

r—j 


TO co 

d) 

V 





ON 














4-J T) 

co 



Vi 



rH 



O 

ON 

00 

ON 

st 

rH 

St 

rH 

n- 

CM 


d) Vi 

d 

On 


TO 






O 


co 



rH 



rH 



M TO 

<u 

NO 


«H 



>-• 



rH 











CJ £ 

44 

ON 


rH 



pt» 














d) <J 

d) 

rH 


o 

















co 

Q 



•d 

















4J 


>4 





CM 














(U o 

44 

h 


d) 



nO 



O 

m 

nO 

CM 

00 

00 

CO 

sl- 

CM 

CM 


jd TO 

O 

1 


-d 



On 














4-> U 


r>. 


4-J 



rH 



o 

ON 

00 

NO 

m 

o 

CO 

rH 


O 


4-J 

4-J 

NO 








o 


CO 

rH 


rH 



rH 



44 d 

d 

ON 


CO 



E 



rH 











°<3 

d) 

0 

rH 

• 

NO 

d) 

T3 




Q 

25 




rH 

rH 







d) 

4-J 

>4 

1 

d 





O 




cd 

TO 







O dJ 

Vi 

h 

m 

rH 





M 

H 



Vl 

Vi 







•H 0 

TO 



a 





H 

J5 


o 

4-J 

4-J 







44 *H 

a 

Vi 

• 

X 

TJ 



CO 

<3 


TJ 

*H 

PS 

PS 

CJ 






44 Vl 

d) 

o 

PV 

w 

a 

o 


cj 

U 

§ 

g 

4-1 

<D 

0) 

H 

rH 





O PH 

Q 

4H 

cx 

TO 

to 

•H 


M 

M 

P-. 

TO 

ti 

CJ 

o 

4-J 

TO 











x: 


25 

►gr 

HH 

rH 

TO 



g 

M 

C 


HJ 

*H 






0 

(X 


O 

s 

Jd 

00 

rH 

• 

• 

TO 

4-1 

*H 

CJ 


•H 

• * 





cd 

TO 


P5 


O' 

g 

4-J 

25 

25 

rH 

PS 

TO 

•H 

TO 

TO 

w 





Vi 

Vi 


H 

s 

W 

w 

<3 



4-> 

d) 

4-» 

4H 


£ 

CJ 





00 

00 

cd 

O 

o 



1 

4-J 

4-J 

<3 

CJ 

PS 

•rl 

CO 

TO 






O 

o 

d)S 

w 

CJ 


> 

Tl 

CO 

(0 



d 

CJ 

TO 

td 

h> 





Vi 

d) 

Vs 

td 



d) 

•H 

TO 

d> 

• 

• 

O 

TO 

h 


o 





PH 

cj 

<3| 



25 

2 

W 

5 

CO 

C/3 

X 

PH 

<3 


CO 






d 

o 

a. 

co 

CD 

Vi 

U 

O 

o 

0 ) 

-d 

4J 

T3 

d 

cd 


o 

r>. 

ON 


o 

co 

Vi 

o) 

rO 

O 

u 

CJ 

o 


o 

r^. 

on 


E 

00 

NO 

On 


st 

i 

CO 


a 

cv 


r*E 


NO 

I 

m 


Pu 

PU 


co 

CJ 

o 

4-1 

cd 

CJ 

o 


TJ 

a) 

14-1 

•H 

CO 

CO 

cd 

rH 

O 

d 


*0 

d) 

g 

O 

4-1 

Vi 

0 ) 

a 

d) 

rO 


co 

co 

d) 

kJ 

•K 


69 


than 0.05% 
















Defense Dependency Ratio, by State, Selected Years 


ACDA/E-156 



M 

0) 

•a £ 



















vO 

vO 

00 

CO 

CO 


CO 

rH 

rH 

rH 

r"» 

o 

uo 

rH 

m 

rH 

o 


p vO 
a) on 

CM 


<r 

rH 

CO 

uo 

o 


VO 

CO 

m 

CM 

rH 

rH 

o 

o 

CO 


O T—1 


co 










rH 






rH 

CD 


















O 0) 
*H G 

4-» G 

Q 


















CO O 



















M CO 

1 i 

V4 

CD 

,£) vO 


















CD 

m 

<r 

r^. 

CO 

CM 

vo 

co 

ON 

VO 

rH 


m 

<r 

co 

uo 

rH 

CM 

O Pu. 

B vo 


















g 

<D ON 

CM 

<r 


rH 

CO 

m 

o 

CO 

00 

CO 

vO 

rH 

rH 

rH 

o 

O 

<f 

0) 

O rH 


co 










rH 






*d V-! 

<D 


















G CO 

0) 4J 

Q 


















P-. *H 
(D rH 
Q -H 

M 


















a 

<D 

X> m 

CM 

00 

00 

<r 

rH 

ON 

CO 

CM 

f-v 

rH 

rH 

m 

00 

CM 

00 

rH 

ON 


e vo 

<D ON 

CM 

<r 

CO 

rH 

CO 


o 

CO 

m 

CO 

vO 

CM 

rH 

rH 

o 

O 

CO 


U rH 
0) 


CO 










rH 







Q 



















a) 

X! 

ON 

rH 

vO 

VO 

CO 

<r 

VO 

CO 


VO 

m 

00 


00 

<r 

CO 

r>. 


S vo 
CD On 

CO 

o 

CO 

rH 

v£> 

CO 

r^. 

rH 

ON 

CO 


00 

o 

rH 

CO 

rH 

CM 


O rH 


rH 
















rH 

CD 


















O 0) 
•H G 
4-» a 

Q 


















?0 O 



















P5 CO 

M 


















V4 

<J> 


















Sn 0) 

,0 vO 

rH 

CO 

o 

in 

rH 

<r 

vO 

CM 

<r 

m 

vO 

in 


vO 

00 

CM 

CM 

U CL, 

S vo 


















a 

0) ON 


O 

Mf 

rH 

vO 

CO 


«H 

o 

co 


00 

o 

rH 

CM 

rH 

CO 

cd c 

U rH 


rH 







rH 









*d co 

0) 


















G *H 

0) i*H 

Q 


















Cu *H 



















<D > 
Q *H 

Vh 


















CJ 

<D 

us m 
6 vo 

oo 

r>» 

rH 

O 

CM 

CM 

o 

CM 

CO 

«H 

oo 

ON 

CO 

CM 

CO 

00 

oo 


CD ON 
CJ rH 
CD 

CO 

ON 

CO 

r—1 

m 

co 

vo 

rH 

00 

co 

co 

r*v 

o 

rH 

CO 

o 

CM 


Q 






/ * 













w 

H 




CO 


CO 










•H 


















rH 









O 









o 







4J 


UH 





cd 


3 


O 







o 






CO 

g 

o 

•H 

CD 

4-J 

cd 


cd 

cd 

u 


U 

u 

o 

B 

cd 

g 

CO 

o 

cd 

CJ 

cd 

•H 

cd 


o 

g 

mh 

u 

CD 

;* 

U 

uo 

co 

N 

cd 

•H 

o 

g 

cd 

U 

cd 

cd 

iH 


rH 

rH 

g 

rH 

CO 

H 

rH 

H 

u 

cd 

o 

o 

CD 

•rl 


<3 

< 

< 

CJ 

u 

CJ 

Q 

Q 


CO 

cO cO *rH cd 


03 

•rH 

•H 


o 

(3 


CO 

•H 

00 

•H 

O 

g 

cd 


cd 

U 

u 

Cd 

US 

•H 


cd 

CO 

O 

o 

& 

cd 

rH 

'd 


G 

rH 

Q> 

cd 

T) 

rH 

G 

o 

cd 

Pm 

O 

EC 

M 

HH 

M 

M 



70 











TABLE 5 (continued) 


ACDA/E-156 


O <0 

•h a 

u c 


$ 2 

CC CO 

u 

>% a 

O (V 

d 

<0 Sn 
73 M 
C CO 
a) vi 
Ou *h 

a> h 

°s 


0) 

,0 

6 vo 

00 

• 

o 

vO 

CM 

rH 

m 

CO 

co 

r** 

m 

o 

ON 

o 

rH 

ON 


O 

co 

m 

0) ON 


co 

CM 


rH 

o 

o 

CM 

rH 

CO 

CM 

co 

CM 

CM 

CO 

O 

m 

m 

O 

to 

Q 





















Vi 

0) 


■g 

vO 

vO 

CM 

rH 

ON 

O 

o 

m 

CO 

rH 

O 

vO 

ON 

00 

ON 


O 

<* 

CM 

co 

m 

0) 

o 

ON 

H 

vO 

CO 

CM 

m 

rH 

o 

o 

CO 

CM 

CO 

rH 

CO 

»H 

rH 

m 

o 

m 

m 

o 

0) 

Q 





















U 

a> 

•i 

1965 


O 

iH 

co 

CM 

vO 

CO 

CM 

00 

ON 

CM 



m 

vO 

<r 

m 

CM 

m 

§ 

u 


CO 

CO 


»— 1 

o 

o 

CO 

rH 

CO 

CM 

co 

CM 

rH 

m 

o 


m 

o 


0) 

Q 


O 0) 
■H C 
vi a 
o 

CO 


& 


u 
<o 
a pu 
d 

<o d 

73 CO 

d *h 

(0 H 
CU tH 


0 ) > 
Q *H 
CJ 


M 
<D 

jd r 
6 vO 
a) ON 

O r 

a) 

Q 


00 

r-* 


vO 

CO 

CO 

m 

rH 

m 

00 

vO 

vO 

vO 

<r 


*H 

O 


m 

rH 

rH 

rH 

vO 


rH 

CM 

CO 


CM 

*H 

rH 

vO 

co 


CM 

CM 

rH 

CM 


Vi 

<0 

X vO 

00 


o 

vO 

ON 

6 vo 






<0 ON 

rH 

rH 

CM 

vO 

co 

U rH 

<o 

Q 







CO 

ON 

rH 


00 


00 

rH 

rH 

CO 


rH 

rH 

rH 


vO 

CM 


ON 

o 

ON 


n 

CO 


rH 

CM 

rH 

CM 


a) 

Q 


X> 

1965 

CO 

o 

VO 

00 


o 

CO 

ON 

CM 


00 

vO 


vo 

CO 

C'. 

CO 

m 

o 

§ 

o 

rH 

rH 

•H 

in 

co 

rH 

rH 

CM 

CO 

O 

o 

rH 


CM 


rH 

rH 

rH 

CM 









to 

w 





V» 

H 





VI 

< 





a) 

H 


to 



to 

CO 

Jn 

d 


73 

d 



tO 


d 

x 


O 

*H 


CO 

o 


d 

(0 

a) 

rH 

cO 


v> 

•rl 

d 

>N 

to 


d 

d 

•H 

u 

co 


<o 

o 

CO 

cO 

jg 




X 

X 

X 













CO 









a) 




d 









Vi 




•H 

cO 








•H 




rH 

VI 



a 





x: 


O 


o 

o 


CO 

a 





to 

to 

O 


Vi 


d 

4-> 

•H 

•H 


cO 


9* 

to 

•H 

^5 

CO 

cO 

co 

o 

CO 

Vi 

cO 



a 

Vi 

X 

Vi 

O 

Q 

00 

CO 

to 

d 

d 

CO 

CO 

CO 

(0 

(0 

O 



*H 

<u 

•H 

o 

cO 

CO 

TJ 

X 

►d 

s 


jd 

x: 

Jd 

d 

to 

to 

■M 

Vi 

CO 





V) 

VI 

O 

d 

to 

to 

d 

X> 


£ 

£ 


s 

u 

M 

•H 

•H 

•H 

•H 

o 

(U 

4) 

<U 

0) 

(0 

CO 

o 

o 

?! 

X 

SB 

SB 

X 

X 

25 

z 

25 

25 

25 

25 

25 


71 


Ohio 














TABLE 5 (continued) 


ACDA/E-156 



ft 

ft) 

42 




















rH 

mt 

CO 

CM 


rH 

CM 

O 

CM 

rH 

as 

CM 

rH 

ft 

o 

CO 


6 

vO 















CO 

CM 


ft) 

OTN 

<0- 

o 

o 

CM 

in 

CM 

rH 

<r 

rH 

o 

m 

<r 

o 

O 


U 

iH 

















rH 

ft) 






* 












O 0) 
•H d 
ft d 

Q 


















CO O 



















M CO 

ft 


















ft 

ft) 


















to ft) 


vO 

CO 

m 

CO 

CM 

LO 

m 

CO 

ov 

rH 

CM 

v D 

oo 

rH 

CM 

o 


o cu 

0 

vO 
















CM 

c 

ft) 

ON 


o 

o 

CM 

m 

CM 

rH 


rH 

O 

vO 

CO 

O 

O 

CO 

CD 

O 

«H 

















ft 

ft) 


















d to 

O 


















ft) ft 

a. -h 

ft) rH 
Q -H 

ft 


















X 

ft) 



















42 

m 

On 

vO 

CO 

rH 

r-. 

m 

CO 

vO 

CM 

CM 

oo 

o 

rH 

CM 

ft 

CM 


0 

vo 


















ft) 

OS 

co 

o 

o 

CM 

m 

CM 

rH 


rH 

O 

m 

<r 

o 

O 

CO 

CM 

i 

CJ 

rH 


















ft) 



















Q 



















ft 



















ft) 



















42 


CO 

o 

CM 


o 

vO 

f-'» 

m 

CM 

CO 

m 

CM 

<1- 



vO 


a 

vD 


















ft) 

Ov 

<* 

rH 

CO 

m 

CO 

c 

CM 

'd- 

Os 

CM 

00 


rH 

ft 

o 

CO 


o 

rH 

















rH 

ft) 


















O ft) 

•h d 

ft d 

Q 


















cd O 



















D5 CO 

ft 


















ft 

0) 


















to <L> 

42 

vO 

<5- 

as 

rH 

sO 

Os 

ON 

vO 

o 

n- 

oo 

as 


CO 

CM 

r^- 

<r 

U Pm 

0 

vO 

















a 

ft) 

Ov 

<r 

o 

CO 

<3- 

CM 

o 

CM 


os 

rH 

r-'- 


ft 

ft 

o 

CO 

ft) d 

a 

rH 

















tj d 

c) 


















d *H 

ft) rH 

ft 


















tX *H 
ft) > 
O -H 

ft 


















CJ 

ft) 



















42 

m 


CO 

m 

vO 

rH 


m 

rH 


<r 

co 

o 

00 


m 

00 


a 

VD 















(u 

ov 

CO 

o 

CM 

CO 

CM 

O 

rH 

CO 

00 

rH 


<r 

o 

o 

o 

CM 


o 

fH 


















G) 



















ft 



















<! 

GO 


(ft 


a 


o 

d 

42 

o 

(ft 

GO 

ft 

ft) 

M 

ft 

O 

o 




(ft 





d 



(ft 

T3 

*h 

(ft 


ft 

d 

ft 

ft 


d 

(C 

0 

0 


eft 

ft 

ft 

4*5 

ft) 

> 

CO 

(ft 

(ft 

ft) 

ft 

ft 

CJ 

Q 

CO 

to 




CO 

52 

ft) 

42 

42 

ft) 

d 

TJ 

ft 

ft 

qj 

d 

O 

23 

d 


<i) 

45 

0 

0 

ft) 

ft 

ft 

00 

co 

H 


CO 

(ft 

X 

ft) 

H 


42 

cO 

ft 


ft 

d 

o 

0 

u 

a) 

> 


CO 


go 

u 

•H 

> 


d 

o 

4-1 

GO 

a 

♦H 

42 

CO 

CO 

:s 


CO 

d 

•H 

GO 

ft 


4-1 

(0 

ft) 

IS 


d 

•H 

CO 

C 

O 

O 

CO 

•H 

3 


GO 

d 

•H 

0 

o 

£ 


co 

►J 

O 

H 


72 


SOURCE: Roger Riefler and Paul B. Downing, "Regional Effect of Defense Effort on Employment," 
Monthly Labor Review , Vol.91, No. 7 (July, 1968), pp. 1-8; and an undated release of the 
Office of the Assistant Secretary of Defense, Systems Analysis, Economic and Resource 
Analysis entitled "Defense Generated Employment, December, 1967." 



















Percent of United States Military Prime Contracts Awarded to the Major Defense Contractors 

($10,000 or More) 


ACDA/E-156 


1 

O 

ON 

00 

CM 

o 

00 


m 

00 

o 

CO 

NO 

00 

r"- 



• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 


ON 

m 

co 

co 

co 

CM 

00 

o 

NO 

NO 

ro 

NO 

CO 

ON 

1 

rH 






rH 

rH 

rH 

Mf 

rH 



NO 


ON 

vO 

m 

*3* 

Ml- 

ON 


ON 

rH 

00 

00 

rH 

CO 

o 

CM 


ON 

•n 

<r 

co 

CM 

CM 

00 

o 

m 

Mf 

CM 

I-- 

Mf 

00 


rH 






rH 

rH 

rH 

»3- 

rH 



NO 


00 

00 

00 

00 

Ml* 

00 


CO 

r** 


m 

NO 


Mf 


nO 















ON 

m 

Mf 

CO 

CO 

CM 

d 

ON 

m 

m 

rH 

NO 

co 


1 

rH 






CM 


rH 

Mf 

rH 



NO 

1 


<r 


NO 

CO 

00 

00 

00 

ON 

m 

NO 

rH 

co 

m 


NO 















ON 

m 

<1- 


CO 

CM 

o 

00 

Mf 

'f 

rH 

VO 

co 

m 

j 

rH 






CM 


rH 

Mf 

rH 



NO 

| Lh 

NO 

NO 

m 

Mf 

Mf 

I-". 

NO 

o 

Mf 

o 

rH 

Mf 

co 

00 


NO 














i 0) 

ON 

<r 

co 

CO 

CO 

CM 

r- 

ON 

NO 

CO 

CM 

m 

CO 

co 

1 >“• 

rH 






rH 


rH 

Mf 

rH 



NO 

1 rH 















i *8 















O 















CO 

m 

rH 

ON 

in 

Ml- 

rH 

o 

CM 

o 

CM 

O 

CM 

in 

ON 

•H 

NO 














Ph 

ON 


Ml- 

CO 

CO 

CO 

CM 

o 

NO 

00 

CO 

m 

CM 

00 


rH 






CM 

rH 

rH 

Mf 

rH 



NO 


<r 

00 

St 

NO 

rH 

ON 

00 

O 

rH 

ON 

ON 

rH 

m 

Mf 


NO 














1 

ON 

m 

m 

MT 

Ml- 

CO 

CO 

CM 


CM 

CM 

m 

CM 

CO 


rH 






CM 

rH 

rH 

in 

rH 




I 

co 

ON 

CM 

rH 

o 

O 

CM 

ON 

00 

ON 

n- 

m 

00 

ON 


NO 















On 

m 

«n 

Mf 

-3- 

-3- 

CO 

O 

r*. 

rH 

co 

m 

CM 

CO 


rH 






CM 

rH 

rH 

in 

rH 




















CM 

NO 

i-*. 

MT 

O 

00 

m 

rH 

CM 

00 

NO 

o 

ON 

co 


NO 

On 

in 


Mf 

Mf 

CO 

CM 

rH 

f>- 

o 

CM 

NO 

CM 

CM 


rH 






CM 

rH 

rH 

m 

rH 



I s -* 


rH 

«n 

CM 

CM 

rH 

00 

00 

00 

CM 

00 

O 

in 

On 

CM 


nO 

• 

• 

• 

• 

• 

• 

» 

• 

• 

• 

• 

• 

• 


ON 

NO 

m 

in 

>3- 

CO 

Mf 

rH 

00 

Mf 

rH 

m 

CM 

Mf 


rH 






CM 

rH 

rH 

m 

rH 



n- 

CO 















fl) 

0) 














*»H 

0 CO 














CJ 

•H T) 














CO 

M M 














1 Oh 

Ph CO 

• 













0 

* 

• 













O 

4H <J 

• 













cj 

O 















4-J 














4H 

o a 














o 

N CO 
*H M 








m 

• 

O 

• 

m 

O 

o 

o 

M 

in 4-J 

• 

• 

• 

• 

• 

• 

O 

CM 

m 

m 


rH 

O 

0 

(3 

4-J 

T3 

"O 

42 

rP 

m 

rH 

1 

CM 

1 

l 

1 

rH 

1 cO 

>% o 

CO 

P 

U 

4-J 

4-J 

i 

1 

rH 

1 

NO 

rH 

NO 

1 

P5 

PQ' CJ 

rH 

CM 

CO 

Mf 

m 

rH 

NO 

rH 

rH 

CM 

m 

r- 

rH 


p 

o 

fl) 

Q) 


o 

o 

*§ 

co 


fl) 
<1) 


o 

CJ 


e 

o 

a 

o 

o 

w 

4J 

cj 

♦H 

o 


a 

o 

•H 

CO 

CO 

<u 

CO 

4-> 

CO 


CO 

CO 

fl) 

P 

00 

a 

o 

o 

HP 

4-» 

o 

ON 


p 

0 

a) 

od 

co 

P 

$ 

H 

4-1 

M 

0) 

aj 

o 

u 

PH 

T3 

C 

cO 


s 

§ 

M 

o 

o 

u 

pH 

4-J 

c 

a> 

0 


a> 

> 

o 

o 


0 

O 

p 

o 

o 

w 


4-> 

a 

(0 


u 

fl) 


(0 

CO * 
P ^ 
a) on 

4-1 nO 
<u on 

Q rH 

o * 
o 

rH u 
CO 

a 3 
o e 
H c0 

'w' 

• #1 

in rH 
CO 

m 


i 

0 

O 

CJ 


CO 

0) 


cO 

a) 


co 

G 

o 


■M 

c0 

U 

fl) 

cl 

o 


rH 

•H cO 
C O 
cO co 

CL -H 
0 pH 
O *H 
U * U 
CO 


e 

o 


o 

o 


CL 


o 

525 


P 

c0 


T) 

cO 

4 


4-J 
CJ 
(0 

•* in m 

N vO 4J 
rH P 

I o 

CO CJ 


00 • 
NO rH 
ON O 
rH > 


0) 

o 


u 

0) 


4H 
4H 
O rH 

P 

00 PQ 
P 


U 

P 

•H 

U 

Ph 


U 

P 

<0 

0 


pN 

u 

4-J 

CO 

a 

M 


g 


2 

• 0 

a *h 

CL H 
Ph 


U 

O 

4-1 

P 


M 

O 

4-H 

0) 

4-J 

cO 

u 

o 

4-J 

O 

<u 

Vh 


/>44 P 
ON O 
vO •> 

ON Q> ''“N 
rH g M 

3 0) 


u o 

0 ) > 

*0 M 
0) CO 
O 


a) 
co 
fl 
a) 

0) 4H 
> 0 ) 
O Q 

o 


•• rQ 
a a) 
o o 
4J c 
oo ^ 
C o 
p 


& 


CM 


O 

u 

4-J 

9* 
»H 0 
rH O 
O CJ 
Q ^ 


4-J 
rH CO 
0) 

• 00 
O CH 
525 CO 
rH 


0) 

CO 

Cl • 

<0 no 

4H <U 
cu CO 
CP CO 


in <0 4-i 

42 o 

• 4-J 


O 00 
> CJ 


p 

0) 


0) 

o 

o 

M 

Oh 


* 

> 

Jp 

P 


•H 

0 O 

(0 

o 

CO 

< 

Tt 

> 

4-J 

CO 

o 

cd 


P 

H 

V4 ON 

(U 



CO 

cd 

0) 

Cd rH 

u 

p 


u 


a 

a 

00 *rl 


o 

ON 

0) 

Q) r. 

P 


co 

4-J 

rH 

p$ 

Q U 

o 

>> 

M 

O 

1 


fl) 

o 

0 

P 

cd 


co 

r rO 


o 

•H 

u 

rH 

0) 

r 0 

• 

p 

U 

4-J 


•H 

O fl) 

CO 

o 

P 

P 

• 

CJ 

r^- > 

• 

o 

0) 

o 

o* 

cd 

ON o 


w 

3J 

CJ 

CL 

CL rH JZ5 


W 

CJ 


O 

co 


73 



































































ACDA/E-156 


3 






H 
































m 

4i 

o 

N«0>0 


ao 

«» 

^H 

•A 

<A 

IA 

«n 

rH 


sO 

rH 

ao 


CA 

IA 

CA 

lA 

<4 

CM 

<n o 

x> 




$ 

o 

H 

© 

r* 

>4 

N 

0< N 

CM 

s» 

rH 

At 

rH 

CA 

CA 


•O rH 


At 

XI 


tA 





CA 

O' 

tn 




H 


o 

rH 



rH 


rH 

<o 




















CA 





<t~* 

*H 































n 

o 
































4 

































at 

M 
































►* 

































0-H 


8 

o 

sr 

'O 

m 

NO« 

CA 

CM 

to 

\0 CA 

IA 

o 

CM 

CA 

ao 

»A 

O' 

rH 

O' 

O' 

'O 

vO 

CM 

cys 

sO 

r- 




4 

U 


o 

m 

r* 

lA 

O' 

•A 

CM 

8 

rH 

IA O 

O so 

a- a 

At A. 

3 

o 

*» 

CA 

r* 

CM 

r- 

3 

CM 

r** 

vO 

tA 

8 

00 -<r 
a» m 


3 

00 

rH 

tA 

lA 

8 




«n 

v 

4k 

» 

•* 

•> 

r 

at 

r 

* 

01 

r 

• 

• 

» 

Ok 

r 

«k 

• 

0k 


* 

r 

4k 

41 

A 

at 

4k 

41 

r 




£ 

3 

ao 


m o 

4A 

•A 

Cl 


IA 00 

rH 


tA 

o 

r- 

f^. 

ao 

At 


CA 

CM 

O' 

At 

O' 

m o 

S3 

CA 




rH 

<o 

O' 

O r*» 

m oo oo 

r** 

<6 00 

8 

r>. 


CM 


8 

CM 

i r\ 


sO 

m 

rH 

at ca so 

O' 

O' 





4 

<“sl 

O' 

-t 'O 

>4 


O' 

O' 

CM 

»A 






sO 



At 


rH 




O 

CM 





> 

• 

• 

• 


Ct 

•> 

• 

«t 













41 






41 

41 






cn 

CO 

rH 


<r 

rH 

CM 

sT 













rH 






CM 

00 






CM 







rH 










































• 











</> 





H 

« 
































■4 

w 

H 
































o 

O 

•4 

sO 

CA 

oo 

CA 

CA 

r- 

<r 

r>» 

o 

00 

rH 

H 


rH 

r-a 

<r 


CM 

CA 

sr 

CA 

CA 

CM 

as 

rH 

CA 




e* 

i- 

• 































rH 


8 

ao 


CM 

CA 

SO 

CM 


rH 

rH 


At 

CA 


£> 

oH 


CM 

x> 


<A 





CM 

Os 

CM 





<44 

•H 



CM 


oH 

sO 




















CA 




n 

4 

o 

rH 































at 

N 
































►* 


4 































4 


r- 

00 

>c 

4A 


r. O 

o 

tn 

SO 

oo 

n- 

<r 

CM 

CM 

o 

sr 

At 


s» 

rH 

m 

CA 

sO 


rH 

CA 

r-k 

* 




o 

rH 

m 

O' SO 

a< 

CM 

•A 

CA 


CA 

m 

ao 


CA 

sO 

00 

rH 


sO 

tA 

O' 

fM 


CM 

tA 

CM 

m 

at 



O 


rH 

O' 

rH 

CM 


r*- 

rH 

o 

rH 

<o 

CM 

CM 

tA 

CM 

sO 

cc 

o 

o 

vO 

O 

<n 



sO 

O' 

<r 


o 

w 



4 

at 

«k 




























Q 



£ 

3 


CM 

•H 

CA 

<£> 

ao 

CM 

4A 

CA 

m 

CA 

CM 

rH 

CM 

rH 

rH 

o 

At 


o 

x> 

*H 

r-* 

in 

CA 

tA 

x> 

CM 

s 



+4 

rH 

O' 

CM 

<A 

O «N 

rH 

rH 

tn 

CM 

rH 


sO 

CM 



CM 

00 


tA 

ON 

O' 

r- 

sO 

iA 

rH 

*H 

CT 





4 

s» 


rH 

lA 

oo 

«A O 

*A 

CA 

«» 

CM 

sO 




CM 


lA 



CM 





r-k 

CM 

O' 

w 




> 

Oh 

* 

* 


at 

4> 

r 

• 













4k 






r 

4k 

o 





-4 

sr 

rH 


*A 

rH 

CA 

«o 













rH 






CM 

r-. 

44 





CM 







rH 





















O H 





</> 



























</> 

5 « 

© 4-» 



















S 














• o 
O H 

« 
































aH 




rH 





























V> 44 

.© 



as 





























o 

1 



4J 

M 




























44 

3 


sO 

o 

o 

lA 

>4 

00 

CM 

O' 

lA 

CA 

CA 

oo 

o 

tn 

fA 

rH 


rH 

CM 

CA 


sr 

sr 

sr 

CA 

CM 


O' 

CA 

r-k 

° & 

aH 


O' 

H 

• 

• 

• 

• 

• 

a 

• 

• 

• 

• 

• 

• 

• 

• 


• 

• 

• 


• 

4 

4 

• 

• 

• 

• 

4 

a 

6 


rH 


o 

<9 

sr 

CM 

r*< 

SO 

CM 

00 

At 

rH 


CA 

CA 


.0 

rH 


CM 

x> 


sr 





CM 

r-k 

rH 

■3 2 

• 


<44 

o 

rH 



CM 


rH 

<o 




















CA 


|4 

W 

o 

rH 




























t< c 

V« 

J3 

4 






























4 « 

o 

at 

H 





























> o 


H 

>* 






























< u 

«i 

o 



4 




























at 

o 

•o 



O 

ao 

o 

>o 

r- 

IA 

«A 

rH 

3 

CM 

CM 

sO 

rH 

tA 

o 

sO 

CA 

in 

m oo 

O' 

s» 

n- 

CA 

O' 


oo 

O' 

*-* 0- 

■H 



sr 

o 

tn 

-J 

•A 

lA 

O' 

rH 

O' 

At 


8 


As O 

rx 

-1 o 

CM 

CA 

rH 

tA 

•H 

rH 

c- 

oo 

CM 

U 

U 

4-4 

u 


CM 

m 

<r 

00 

O' 


O' 

lA 

00 

sO 

•A 

o 

<r 


o 

<T\ 


oo 

CM 


rH 

IA 

(A 

CA 

CA 

rH 


a T3 

u 

o 

• 

at 

* 


























r 

4k 

m g 

01 


£ 

3 

m 

r- 

00 

m 

«» 

<A 

rH 

At 

CA 

oo 

sO 

s» 

ao 



SO 

o 

lA 

CM 

tA 


rH 

sO 

CM 

X) 

tA 

sr 

O 

4J 3 

S-8 

H 

cn 

lA 

rH 

o 

<A 

s» 

-4 

At 

r* 

•A 

rH 

o 

CA 

CA 


sO 

>» 

00 


o 

rH 

rH 

'£> 

sO 

SO 

CA 

CA 

rH 

a „ 


4 

CM 

sO 

rH 


ao 

fM 

rH 

CM 

<A 

<r 

CM 

oo 

ao 



CM 


lA 


rH 

rH 

rH 




r-k 

oo 

o 

o a 


6 


> 


* 

* 


<* 

at 

>» 

•» 













4t 






• 


u « 

2 

B 



m 

CA 

rH 


vO 

rH 

<A 

f>* 













rH 






rH 

00 

w. 

« 



CM 







rH 





















St 86 M 

3 



«/> 



























</> 

■ O 


0 































«H M 

T3 

£ 































W ft. 
ft. 

S 

4J 































U 

^ g 

• 

2 


*H 

<9 





























at ^ 

CM 

4J 

N 




























* 8 



SO 

o 

O 

r- 

00 

•H 


rst 


IA 

At 

O' 

o 

r«4 

s» 

rH 



rH 

lA 


s» 

00 

>» 


CA 

CM 

CA 

CM 

<A 

4J « 

s 


06 

H 

• 

• 

• 

• 

r 

• 

• 

• 

• 

• 

• 

• 

• 

• 


a 

a 

• 


• 

• 

4 

a 

a 

a 

• 

a 

a 

■H £ 



H 


o 

CM 

s» 

CA 

r- 

SO 

CA 


CM 

rH 


CA 

<A 


x> 

rH 


CM 

Xt 


sr 






<£> 

CM 

rH 3 

w 



<4-1 

o 

rH 



CM 


rH 

sO 




















CA 

3d ° 



V. 

o 

rH 




























x o 

H 


4 






























t- 

3 


at 

M 





























kl ft. 

o 




4 





























>. 



rH 


O 

rH 

'O 

<A 

sO 

co 

rH 


vO 

O' 

r-k 

o 



8 

O' 

IA 

CM 

o 

rH 

CM 

00 

O' 

CM 


vO 


CA 

at to 



4 


o 

O' 

00 

rH 


s» 

rH 

CM 

rH 


r^k 

O' 

00 

IA 

8 


O' 

r*4 

o 


tA 

vO 

sO 

sO 

O' 


vO 

D 



u 

at 

3 

vO 

o 

Ch 

rH 

rs| 

<A 

o 

o 

O' 

tA 

o 

CO 

rH 

<A 

rH 

rH 

CM 


tA 

rH 

r^. 


lA 

oo 

o 

00 

s O 

4 



•H 

oo 

00 

O tA 

N00A 

CA 

CA 

At 

At 

CA 

s» 

sO 

rH 

O' 

CA 

r^. 

CA 

CM 

<A 

CM 

IA 

CM 

o 


-a 

<n 

> 



Uo 

H 

<n 


Q 

CM 

tA 


00 

<A 

O' 

At 

At 

3 

CA 


rH 

CM 

CA 


o o 

C7t O 


s» 

CM 

m 

tA 





<9 

o 

rH 

CM 


00 

lA 

oo 

<A 


CM 

o 



sr 


<o 


rH 

CM 


rH 



00 

tA 


4J 




> 

at 

• 

m 


r 

at 

01 

a» 













4k 







4k 

« 






<n 

r-i 


sO 

rH 

m 

sO 




















CO 

z 





vM 







rH 

























(A 



























</► 


i § 

v i* 

U 60 

3 O 

O w. 

o a, 

t- 

o- 


o 

H 




S 9SS 

w at £ u „ w „ 

—• «H • n r-t « 

8 U U fc -H *J 

4i * m « 



•§ 2 8 b 

W h ft. U 


74 


/ 
































TABLE 7 (continued) 


ACDA/E-156 


X 


• n 

H 

e 
> 


c & 

9 O 
U U 
O O- 


H 

O 

• 

s 


Ov 

r*. 

oo 

nr 

cm 

• 

n 

v> 


H 

O 

• 

§ 


H 

O 

8 


S 

H 

8 


r> 

</> 


N 

O 


* 

cA 

O 

cA 

A 

«A 

H 


cA 

</> 


O 

H 


CA 

• • • 
^ m ca 


*C ^ O' 
CM NO H 
H n H 
•» •» * 
H «7» 

N O' »0 
O © *H 


^ N H lA H 


m ia 
• • 
IT) ^ 


On IA 
CD tO 
CJ\ CA 
• • 
CA rH 

a* co 

^ lA 


m 


•a 

•n 


noOOOONH 
• ••••• 
i-tHHinn 


eo-9<-* 

© © © © (S 9v 


O' 

s* 


O' 
© 
sr I-* 
* * 

sO © 
© <N 


ST 

O' 


o 


O' 

CM 


>0 

%T\ 

> 

n 

8 


CM 


o 

m 

•H 

CD 

* 

%• 

* 

* 

* 

ft 

to 

o 

r-> 

vO 

CM 

CA 

vD 

sr 

ca 


ca 

CM 


CO 

>C 

00 

rH 





» 

ft 






H 



h>d'ONinin^)N«'0 (M/i>o 

O'Hr'ffi'CON'Or'N^Nifl 

«no>OH5iniflHOHO>oo 


« n O' n 
NNO 

id H H 


OlHHlANNlftN 

ftOn#N«mo 

Ol H H H O' -O 
• • 
«“< © 


CM 

© 

© 

ft 

N 

CM 

00 

* 

IA 

*H 

</> 


CH O (O 

• • • • • 

\C n n m 


T- 

© © 

<h © 


lO N 00 N O H 
• •••*< 
^ N h n n 


^ vo ^ lActtf^^ronrivo 
••* •»•••••• 

£ H O N ^ © ©O' 


sr 


4 

2. 

r- 

o 

pO 

>D 

<r 

oo 

ft-C 

CM 

00 

CO 


© 

•H 

r-4 

o 

\n 

O 00 

o 

»n 

eo 


f"* 

o 


CO 00 

<r 

•o 

oo 

o 

O' 

rH 

fO 

ao 

O' 

Os sO 

m 

CM 

co 


rH 



o 

CM 

< 

ao 

CM 


*H 

O' CA 

H 

<T 

o 

O' 

CO 

vC 

© 

O' 

O' 

CM 00 

O' 

«r» 

O' 

»A 

© 



cn 


cn 

<T 

oo 

CM 

00 

© O' 


m 


O' 

sr 

CM 

oo 

4T> 

O' 

ro cn 

r> 

SO 00 

00 

CM 


© 

un 

m 

ro 

ON 

CM 



O -* © 




CM 

r-H 

CM 

sO 

r> 

© CM 


CM 

CM 

sO 




00 

cn 

O' 

r-» 

O' 

CM 

CM 

o s» 

r-^ 

O' 

O O' 

vO 

s£> 

CO 

vO 


H 


r** 

CM 

o 


t-d 

CM «H 

H 

•H 


CM 


so 


• ft 

•> 

ft 

ft 

• 

« 




* 

ft 




ft 







ft 

<», 

ft 

r>* 

vD <M 

H 

p? 

CM 

CO 

o 





*—4 











H 


vD 

fA 






CM 



















in 
























W 


© © © 

oion 


«N O' 
• • 
CN © 


00 


© 

© 


*M im yO r- 
• • « • 
M H O' N 


H 'J O 
© © © © 


CO H »0 *0 ^ < O' 

CO s» « 


CN 



O' 

C^ 

oo 



m 

© 

© 

lA 

O' 

4A 

sy 

<o 

»A 

t 

© 

© 

CM 

CM 

sr 

8 

© 

<M 

O' 

sr 

© 

rH 

M? 

8 

rH 

O' 

O' 

cn 

iA 

sO 

© 



sr 

rH 


CM 

H 

© 

Hf 

O CA 

o> © 


© 

f". 

sO 

O' 

♦n 

CO 

p-Y 

lA 


CM 

© 

-* 


CD 

tA 


rH 

© 

© 

r* 

<N 

rH 

rs o 

rH 

o 

rH 

CM 


r*. 

r-» 

00 

oc 

oo 

© 

m 

© 



sr 

o 

O m 

CM 

rH 

CM 

r*. 

« 


O' 

CM 

r*4 

rH 

r> 


O' 


so O' SO 


rH 

CM 

CM 

O' 

8 

rd 

rH 

sO 

sO 

CM 


O' 

>n 

<M 

© 

iA 

rH 

»A 

rH 

<r 

r^ © 

CM 

•A> 

H 

r> 

CM 

vO 

CD 

'X> 




f* 

rH 

rH 


rH 

rH 

CM 

rH 

rH 

rH 

sD 

CA 

rH 


'ONH'ONO 


CM 


CO 


H CO 


in oo o s < o 
«••••• 
<t >c o n -o n 


Offl n O' H «» 
NOCOWO"» 
00 CO O 00 © »o 


HO O 00 N H 
© © © © O O' 
'O^OH'JS 

•O (M >-C -T H O 


sr 

CO 


cO 

co 

co 


« H >C O N H 
«*»»•• 
H n H O' CM 


CM OO O LO O O' 
co CO O' CO CS © 
sr r-. ps no io ro 


O H n ie(MNMOO>»N 

• • • •••••••• 

ii >j h n x co -■» oo 


NO'JOON'OOONNO'^S 
CO CO H VC N O © H © 00 pO O O 
0'0'COOcrtN#OOP*^0''» 


O' 

a 


N H sO pj O' pp 
CM 00 © co cO CM 
co O' CO 00 00 
» 

CM 


vO O •-< c~~ C'' 

© © *£ 

CM CO o 


OOCM<T~»CO^r''£) 

^OrtHiCOOg 

rCONNHHO'S 


■H CM 


CO 

H 

CO¬ 


CO 


co 

«» 


00 

sO 

O' 

» 

CO 

a 


</y 



OO 

5 

H 

•o 

8 


(0 

II 

rH 

U 

» *r4 

-I 

o > 

•H 

■ss 

> l 

4J O 

<0 u 

I & 

<3 J 



U U 9 « ft 
a _ r-c >> q «oo 

13 i -J I .* e- S S 

S o i b u c, « u g 

•ft © S vC rl 1 • B 

Q£Oi*fctd<ftft‘ft« 

i § si tstzz § 



75 




























ACDA/E-156 


"O 

01 

o 

c 


G 

o 

g 


W 

si 

g 


1 i 

at l-t 

m oq 
3 o 
o u 
o a. 
u 
a. 


H 

O 

• 

o 

o 


CN H (S Oi ON oo 


in irt n »o »o rl 


00 

X 


-4 O CN CN X rH 
H N H O f'l O 


XlHOmjJOnOOOONH 


on 

H 


as 

C 

o 


CO 

U 

O 


T3 

g 


(A 
CO 
<0 
r—t 
O 

c 


> 

X 

CO 

TD 

M 

CO 

iJ 

O 

CO 

Cl 

4J 

c 

o 

o 

G 

B 

•H 

J-t 

Cl, 

H 

c< 

CO 

i-i 


u on 
0) 

o • 

(X 

r^ 

cn « 

4H 
• M 
G M 
CO 

C G 
CO iH 
<4-1 X 
(0 CO 

a h 


o ^ 

o 

4-i f'- 
G O' 
0 ) i-c 

B 

4-1 Cl 
M 0) 
CO X 
(X O 

<0 4-1 

Q O 

O 

.. o 
G cn 
O w 

4-1 

60 O 

C 

X O' 
X X 
co 

CO >4 
S ft- 
^ I 
00 

■H n vO 

m <o a\ 

U O' H 


co 

a; 

a 

•H 

> 

V- 

<0 

C/3 


CO 


I >* 
CN ft- 
■H X 
y O' ^ 
m h o 


x - 

M 
M M 
O X 

Ct-4 

<0 

<0 X 
M XI 
CO CO 


C 

<0 


o 

o 

•a 


ON 

o 

O 

m 


O 

m 

rH 

rH 

CN 

cn 

-4 

CM 

in 

Mt 

m 

CN 

ON 

f'' 

<r 

CN 

-4- 

X X 

o 

CN 

-4- 

X 

X 


H 

H 


r>. 


O' 

o 

sr 

CN 

cn 

cn 

CM 

-4 

CM 

m 

CN 


rH 

X 

CN 

rH 

X 

CN 

fH 

CN 

X X 

o 

o 


-4 



o 


00 

X) 


x 

cn 

><r 

ON 

X 

cn 

m 

•H 

CN 

m 

m 

cn 

m 

o 

X 

X 

X 

rH 

CN 

rH 

X X 

X 

X 

X 

X 

X 


4J 

A 

c 





























G 


o 


•H 

vO 

CO 

00 

rH 

rH 

r>. 

00 

rH 

CN 

ON 

X 

cn 

X 

O' 

rH 

On 

X 

X 


<r 

ON 

o 

x o 

X 

X 

X 

X 

B 


G 

X 

"O 


rH 

X 

X 

CN 

m 

fH 

ON 

fH 

00 

■4 



rH 


O 

r-. 

<r 


X 

ON 

Mf 

CN CN 

X 


X 

X 

u 


J-i 

ON 

G 


cO 

cn 

O' 

O 

r- 

m 

CN 

'O- 

m 

cn 

O 

O' 



'O’ 


ON 



O' 

rH 

rH rH 



X 

-4 

o 


X 

*H 

O 

• 

0k 

A 


* 

0k 


0k 





0k 














• 

«k 

IM 


o 

i 

Cu 

ON 

'O’ 

rH 


in 

rH 

cn 

r- 




cn 














X 

CN 

u 



CN 

CO 

CM 







*H 




















fH 

G 


•» 

X 

G 

<o- 



























o> 

Cu 


G 

ON 

U 































CO 

fH 

u 
















60 













G 


C 


o 
















c 













X 


G 

CO 

o 


CO 














•H 















<M 

M 



g 














fH 













O 


G 

G 

G 







4-1 









-a 








4J 





4-4 


Q 

G 

X 


<0 





G 









G 








G 








>-< 

4-4 


Cu 


CO 



CU 

















<U 







*M 




x 


CU 



B 









X 








B 





tu 


o 

rH 

T) 



CO 

X 



a. 

















a. cn 





O 



G 

G 


<4 

0) 

rH 



X 









4 








x at 





5 


>N 

a 

G 



V- 

a. 



3 

















3 x 







4-4 

co 



CO 

<0 

a. 



5* 








cn 








cr x 


4.4 





to 

X 

• 0k 


0) 

a 

9 










M 

CU 







W a 


c 



O 


4-1 

ft- 

G 


X 

VI 

CO 












cu 

X 







a- 

4-4 

<y 



4x 


G 


m 


X 





G 









G 

CO 







-0 3 

G 

B 





U 




X 

-a 

4 



O 









•H 

cx 

cn 






in 

CU 

cx 



G 


G 

• • 

* 


6 

<u 


co 


H 









c0 

•H 

<u 






cn 

B 

X 



3 


G 

G 

x 


G 

4-1 

4-1 

B 


M 








co 

4-4 

3 

•H 


4-4 




at x 

o- 

3 



rH 


X 

4-4 



CO 

C0 

C 

cu 


CO 








4J 

c 

5* 

X 


c 




*H 

X 

cr 



cO 



G 

• 


CO 

rH 

CU 



O 








G 

o 

a. 


cu 



4-4 

X 4-4 

3 

w 



> 


G 

V 

a. 


< 

<U 

S 

CO 


•H 








CO 

CJ 


o. 


B 



G 

a. c 

cr 






X 

in 

cu 



P2 

CX 

>4 


G 








o 


4 

3 


a 

4-4 


<U 

a, <u 

w 

HJ 



M 


4-4 




•o 


X 

V) 


3 



to 





•H 

T) 


X 


•H 

G 


B 

3 S 





C0 



•a 

0k 

X 

4) 

4 

3 



y 



0) 





M 

CU 

00 



3 

cu 


cx in (x 

X 

cn 



rH 


14-4 

C 


CO 

4-1 


cr 

cu 


B 



»H 





X 

Wi 

G 

X 


O’ 

B 


•H 

X 

G 

G 



rH 


O 

G 


4-1 

a) 

(0 

u 

o 


o 



O 





3 

3 

H 

c 


u 

cx, 


3 

x 3 

X 

X 



o 

H 



X 

O 

H 

rH 

0) 

0) 

c 

4J 

« 

a 


u 


a 

V 

X 

JC 





X 

O 

o 

X 

4J 



c 

■H 

3 


s 

co cr 

4-4 w 

rH 

T> 

rH 

a 



•a 

m 

o 

G 

G 

C 

o 

ON 

«H 


ad 

■H 

<M 

cn 




rH 

0) 





>-0 

V4 

o 

*H 


o 




c 

G 

a. 



G 

• 

X 

X 




60 

CO 




*H 

O 

> 






Cu 

fH 

X 


•H 

G 

G 

<u a 

eg 

3 


rH 

JS 

o 

VM 

oc 

u 


<^j 

C 

M 

•o 


10 

CO 

X 






CO 

4-4 

O 

3 

<u 

4J 


O 

0 

a x 

w 

X 


(Q 

4-4 


X 

G 

G 



W 

O 

G 


o 

4-1 

X 

4J 



a 


fH 

>N C 


X 

o 

CO 

G 

•H 

•H 

j= 




4-4 


a 

o 

P6 

X 


cn 


U 

CO 


•H 

O 

<u 

cO 



0 

g 

cu 

rH 1) 

* 


G 

4J 

O 

4-4 

M 

<-o a 

cn 

u 


o 

(0 

eg 





cu 

M 

X 



c 

4J 

> 

•3 


*1 

H 

3 

3 

0) H 

w 

fr 

(U 

l-l 

•H 

o 

G 

« 

fH 

cu 

cn 


0) 

•ri 

X 





B 

<4-4 

<! 

G 


0 

•8 


B 

2 


u 

0) 

Cm 

*J B. 

44 

4J 

o 

4J 

2 2 

rH V4 


X 

G 

•8 

4-4 

• • 




3 

cO 


*H 


Ci 

4J 

0 

c 

•l 

H 

rH 


CO *H 

rH 

CO 

as 

a 

O 

(fl XX 

4-4 

G 

3 


ft] 




M 

Ci 

M 

•H 

co 

M 

cn 


u 

» 

G 

o 


a 

o 

Wi 

H 3 

•H 

4J 

■H 


3 

4-4 

4J 

u o 

V- 

o 

X 

X 

rH 

n 

u 




<M 

M 

o 

V- 

(U 

X 

C0 

co 

a. 

•H 

CJ 

<U 



CX 

2 



M 

4-4 

0) 

X 

CO O’ 

a. w 

4-4 

K 

•H 

rH 

a 

X 

3 

« 

■8 

3 3 

X 4-1 

X) o 

<U 

4-4 

fH 

t 

G 

x 

3 

g 




X 

X 

4-4 

•H 

X 

fH 


o 

o 

<u 



<U 

4-4 

4) 

<U 

■H 

3 



o 

0 

a) x: 

CO 

rH 

0) 


r 


o 




< < 

o 


cn 

w 


u 

52 




cc 

o 

tn 

H 


X 

H 

CM 

O 

o 

as ft- 

as 

<c 

X 

X 

X 




76 
















ACDA/E-156 


TABLE 8 

Occupational. Characteristics of Defense-Related and Total U.S. Employment 

I 

Fiscal Year 1968 - Percentage Distribution 


OCCUPATIONAL GROUP 

DEFENSE ASSOCIATED 
EMPLOYMENT 

TOTAL CIVILIAN 
EMPLOYMENT 

Professional Workers 

14.4% 

12.8% 

Managers, Officials, 
and Proprietors 

8.8 

10.0 

Salesvorkers 

2.4 

6.0 

Clerical and Kindred 

Workers 

17.6 

16.8 

Craftsmen, Foremen, and 
Kindred Workers 

20.1 

13.2 

Operatives (semiskilled) 

26.4 

18.4 

Service Workers 

4.6 

12.3 

Laborers and Farm Workers 

3.5 

10.5 

TOTAL 

100.0 

100.0 


SOURCE: Max A. Rutzick, "Skills and Location of Defense-Related Work¬ 
ers," Monthly Labor Review » Vol. 93, No. 2 (February, 1970), 

p. 12. 


77 




ACDA/E-156 


TABLE 9 

Educational Attainment of Civilian Labor Force and 
of Military Personnel, Selected Years, 1952-1969 

I. PROPORTION OF HIGH SCHOOL GRADUATES BY GROUP 


MILITARY PERSONNEL b 



CIVILIAN 3 
LABOR FORCE 

CIVILIAN MALE 
LABOR FORCE 

ENLISTED 

MEN 

OFFICERS 

1969 

38.4% 

34.4% 

82.0% 

99.8% 

1967 

36.6 

32.9 

82.7 

99.8 

196:5 

35.5 

32.0 

81.6 

99.6 

1962 

32.1 

28.7 

72.7 

99.4 

1952 

26.6 

23.3 

52.6 

95.6 

II. 

PROPORTION OF 

COLLEGE GRADUATES, 

BY GROUP 


1969 

12.6% 

13.9% 

4.9% 

70.7% 

1967 

12.0 

13.2 

2.2 

68.6 

1965 

11.6 

12.4 

1.3 

69.0 

1962 

11.0 

11.7 

1.4 

61.6 

1952 

7.9 

8.0 

2.8 

46.6 


SOURCE: U.S. Department of Labor, Manpower Report of the President , 
March, 1970 (Washington: Government Printing Office, 1970) 
Table B-9, pp. 254-255; and Directorate for Information 
Operations, Office of the Secretary of Defense, Selected 
Manpower Statistics (Washington: Department of Defense, 
April 15, 1970), p. 35. 

Data for Civilian Labor Force are for the month of October in 1952 
and in March in all other years. 


Data for Military Personnel are estimates as of December 31 of each 
year. 










ACDA/E-156 


w 

i-j 

3 

H 


■u 

C 

§ 

cu 

o 

rH 

CL) VO 
> ON 
<D rH 

Q 

I 

SI 

o o 
j-i m 
ctf ON 
d) rH 
0) 

d) (0 

P4 M 
«0 
<D 


O 

4-1 


0 ) (0 
(1) O 
M CO 
3 -H 
4-> Pk 
•H 

* 

C CO 
d) d) 


CO 

PrT 

OrH 

rH 


CO 


ON 

CO 

CO 

rH 

o 

On 

ON 

OV 

o 

CO 

ON 

o 

CM 

M 


VO 

rH 

CM 


CO 

00 

CO 

00 

00 

CM 

ON 

rH 

vO 

00 


rH 

vO 

hJ cj 

vO 


<T 

O 

r>. 

ON 

00 

1". 

p^ 

CO 

o 

00 

vO 


o 


o 

rH 

d § 

«n 

m 

00 

O 

00 

vO 

ON 

CO 

CM 

r"» 

00 

OV 

<r 


CO 

rH 

rH 

00 

O 

p^ 

vO 

vO 

vO 

<r 


iH 

o 

On 

p* 

m 

<r 


CO 

CO 

CO 

CO 

rH 

<1 

rH 

rH 

rH 

rH 

rH 

rH 

*H 

rH 












</> 



















Ph 

W 

55 

W 

O 

M 

S 

< 


o 

M 

W 

CO 


O 

o 


25 

O 



S'o 

o 

W 

w c 

w 

O 

0) 


<£ 

rH 00 


Pu 

05 <d 


CO 




a) •d 



*d d) 



d) 4-> 

25 


Pn o 

O 


<w 

pH M 




ON 

m 

p*. 

rH 

CM 

CM 

rH 


O 

p^ 

rH 

rH 

p- 

00 

vO 

CM 

CM 

r>. 

ON 

ON 

00 

ON 

O 

O 

rH 

CM 

CM 

CM 

m 

VO 


CO 

rH 

CM 

CM 

CO 





rH 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

iH 


o 

O 

CM 

rH 

CM 


CM 

rH 

O 

CM 

m 

00 

p^ 

rH 

CM 

00 

m 


VO 

On 

CM 


<r 

00 

rH 

CM 

00 

m 

CM 

rH 

rH 

CM 

CM 

CM 

CM 

CO 

CM 

CM 

co 

CO 

CO 

CM 

CM 

rH 












rH 

<r 

m 

o 


CO 

ON 

p^ 

CM 


vO 

CM 

m 

rH 

O 

rH 

m 

p* 

vO 

m 

in 

m 

m 


CO 


Mf 

CO 

co 

CM 

CM 

CM 

CM 

co 


v0 

vO 

rH 

CM 

CM 

iH 

p* 

CO 

vO 

m 

CM 

in 

rH 

p* 

m 

rH 

-3- 

M* 

sj- 


m 

m 

vO 



co 

p-* 


CM 


co 


vO 

vO 

m 

O 

CM 

in 

m 

vO 

ON 

ON 

ON 

CM 

p* 

p* 


p^ 

p* 

p* 


4J 

CO 

<u 


00 

vO 

ON 


r* 

vO 

On 


vO 

vO 

On 


m 

<r 

CO 

CM 

rH 

O 

ON 

00 

p* 

vO 

m 

<r 

CO 

vO 

vO 

vO 

v£> 

VO 

vO 

m 

m 

m 

in 

in 

in 

m 

On 

ON 

ON 

ON 

On 

ON 

ON 

ON 

ON 

ON 

ON 

ON 

ON 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

rH 


79 


1952 











ACDA/E-156 


73 

a) 

3 

s 

•H 

u 

G 

O 

a 


ca 

K-J 

PQ 

<d 

H 


co in oo 

ca 

M O CM 
J u| O 00 
CO o 


o 

c 


o z 
o 




Z CO 
W CO 


CJ 


MI 00 


X o 

O CJ 

< 



Pm 

O 


g 

5? 

CM 

ca 

Q 


2 

o 

M 

H ca 
< od 

J <: 
D Cm 
i 3 H-d 

Pa ca 

« Q 

H 2 


2 

H 


W 

col 

2 

cal 

Cm 


ca ca 

< a 

CM 

Ca Cm 
Q O 



O 

CM 


in 


co 


co CM 


co 

vo 


o 

v£> 


m 

os 


CM 

m 

os 


M 

O 

•H 

Ml 

CM 

O 

c 

<u 

00 

< 


Ml 

3 

o 

0) 

CO 


00 

«n 

Os 


O 

*J 

Mi 
O 
•H 
M 

a 

CO 

o 

M 

4-1 

3 

co 

G 

o 

Mi 

0) 

<J 

Ml 

O 

4-1 

a) 

0) 


o 

a 

to 

Mi 

o 

CO 

♦H 

> 

73 

< 



f—1 

cO 


CO 

G 


Ml 

O 


0) 

•H 

o 

73 

4-1 

m 

3 

cO 

Os 

Cm 

53 

1—1 

CO 

JO 


CO 

Ml 

CO 


O 

73 

4-1 

O 

CO 

G 

O 


0 

<u 

Mi 

CO 

CO 

3 

Ml 

3 

00 

•H 

Cm 


-3 

O 

Mi 

co 

3 

CO 

a) 

ca 

Pi 

O 

4-1 

CO 

73 

G 

3 

Cm 


co 

Mi 

(0 

TJ 

0) 

Cm 


7 


oc 

v£ 

O' 


r*N 

vO 

o> 


CO 

* o 
3 co 
o 
•H Cm 

4-1 

cfl • 


CO 

3 


T3 
3 
3 *H 
O 
Cm 


3 

•H 

o 

4-1 

3 

CJ 

3 

c 

•H 


o 

a 

CO 

♦H 


4-1 

•H 

•H 

CO 

4-1 

3 

3 

O 

3 

•H 

•H 

4-> 

O 

3 

CO 

2 

Ml 

3 

3 

•H 

-3 


4-1 

3 

o 

4-1 


3 

73 

T3 

3 


3 

0 


O 

* 

Mi 

4J 

4-1 

3 


3 

73 

0 

3 

a 

4-» 

o 

3 

i—i 

& 

3 

0 

> 

o 

3 

o 

Q 

• • 


ca 


cj 


ca 


3) 


O 


co 



80 


i--969,_Vo 1«_XVII (Washington: Government Printing Office, August, 1968), pp. 216- 





Research, Development, Testing and Evaluation Contracts as a Percentage 
of Defense Prime Contracts by Region, Fiscal Years 1962 - 1970 


ACDA/E-156 













o 



<r 

CO 

CO 

CO 

00 

ON 

CM 

CM 

r". 

• 









• 

ON 


ON 

o 

00 

o 

I-"- 

m 

o 

CO 

rH 

rH 

rH 

rH 

CM 


i — i 

rH 


CM 

CO 

rH 












ON 

ON 

vO 

<* 

00 

CO 

ON 

m 

in 

CM 

vO 

vO 

• 









• 

On 

vO 

vO 



vD 

VO 

vO 

m 

CM 

o 

rH 

rH 

rH 

rH 



rH 


CM 

CO 

rH 












00 

CO 

<f 


rH 

CO 


<»• 

CO 

m 

m 

vO 

• 










ON 


in 

<r 

CM 

m 

O 

00 

o 

CO 

VO 

rH 

rH 

rH 

rH 

rH 


CM 


CO 

CO 



6^ 











O 

r^. 


<* 

00 

rH 

VO 

00 

ON 

m 

vO 











ON 

vO 

VO 


O 


00 

00 

CM 

ON 

vO 

rH 

rH 

rH 

rH 

rH 


rH 


CM 

CM 













vO 

vO 

vO 

rH 

f". 

rH 

00 

CO 

ON 

m 

CO 

v£> 











ON 

vO 

CO 

m 

ON 

VO 

ON 

CM 

•n 

oo 


rH 

rH 

rH 

rH 



rH 

rH 

CM 

CM 













m 

CM 

00 

CM 

vO 

rH 

00 


oo 

ON 


v£> 

• 










ON 

o 

ON 

n- 

CO 

vO 

rH 

rH 



CM 

rH 

CM 

rH 

rH 

rH 


CM 

CM 

CM 

CM 













■<r 

vO 

CM 

00 

CM 

<r 

00 

vO 

vO 

CO 

CO 

vO 











ON 

CO 

<r 

o 

rH 


O 

m 

vO 

ON 

rH 

rH 

CM 

CM 

CM 

rH 


CM 

rH 

CO 

CO 



&>$ 










CO 

vO 


CM 

ON 

<r 

CO 

v£> 

rH 

o 

CO 

vO 

• 










ON 


rH 

CM 

ON 

vO 

o 

ON 

ON 

CM 

rH 

rH 

CM 

CM 

CM 



CM 


CO 

<r 













CM 

<r 

CM 

m 

rH 

o 

ON 

m 

00 

CM 

rH 

vO 

• 










ON 


vO 

in 

rH 

m 

CM 

vO 

CM 

CM 

CM 

rH 

CM 

rH 

CM 

rH 


CM 


CO 

<1- 






rH 

rH 










id 

cd 










u 

M 









o 

4-J 

4-J 









*H 

G 

a 

O 




•H 


CO 


u 

Q> 

Q) 

*H 

rH 



Cd 


0) 


a 

O 

u 

4-» 

cd 





U 

HO 

CO 



g 

u 



$ 


Id 

g 

rH 

X 

A 

cd 

u 




<3 

u 

Cd 

4-J 

u 

u 

rH 

G 





C/3 

rH 

<3 

u 

u 

4-J 

a) 

G 


t-3 

fn 


00 


o 

o 

<3 

o 

•H 

o 



TJ 

g 

<D 

P5 

z 



cd 

•H 

cd 


<D 

w 

rH 



A 

A 

u 

44 

M 


u 


T) 

4-1 

u 

4-J 

4-J 

G 

•H 

CO 



3 

T3 

0) 

CO 

0 


3 

o 

cd 


c 

(V 

•H 

cd 

0) 

0 

o 

o 

cd 

H 



z 

2 

w 

De 

C/3 

C/3 

£3 

P4 

<3 


id 


o 


•H 


4-J 

1 

CO 

CM 

•H 

vO 

4-J 

ON 

cd 

rH 

u 


C/3 

CO 


>4 

u 

cd 

o 

(U 

4-4 

►« 

0) 

rH 

4-J 

cd 

cd 

O 

u 

CO 

o 

*H 

4-J 


o 


a) 


V4 

• • 

*H 

Q) 

O 

4-J 


cd 

•N 

4-1 

0) 

C/3 

CO 


c 

no 

a) 

a 

4-1 

cd 

a) 


Q 

c 


o 

44 

•H 

o 

Ot 


a) 


u 


cd 

> 

4-J 

A 

Q) 


u 

CO 

a 

TJ 

a) 

M 

C/3 

cd 


5 

a) <: 

A 


4-J 

4-J 


o 

4-J 

id 

O 

J4 


4-J 

<1) 

G 

o 

O 

‘H 

U 

4H 


44 

0) 

O 

0 


•H 

g 


•H 

P4 

cd 

4-J 

& 

cd 

cd 

r d 

4-J 


*H 

0 rH 

o 

*H 

M 


44 

0 \ 

TJ 

CO 

<U 

0) 

4-> 

O 


3 -H 

O <D 
O CO 


w 

o 

g 

o 

C/3 


81 


1967 (Washington: Office of the Secretary of Defense, December 27, 1967), pp. 1-2 
and pp. 60-82 and the corresponding document for Fiscal Years 1968-1970 (October 30, 
1970), pp. 1-2 and pp. 64-74. 














ACDA/E-156 


TABLE 12 



Federal Expenditures 

for Research, Development and 

R 

& D Plant a , Relative 

to Total Federal 

Budget Outlays, 



1940-1970 





(millions of dollars) 


/ 





R & D 

EXPENDITURES / 

FISCAL 

TOTAL FEDERAL 

R & D 

AS PERCENT OF TOTAL! 

YEARS 

BUDGET OUTLAYS b 

EXPENDITURES 

FEDERAL 

BUDGET OUTLAYS 

1970(estimate) C 

$195,272 

$16,922 


8.7 % 

1969(estimate) 0 

183,701 

16,553 


9.0 

1968 


178,862 

17,030 


9.5 

1967 


158,352 

16,842 


10.6 

1966 


134,654 

16,018 


11.9 

1965 


118,431 

14,889 


12.6 

1964 


118,585 

14,707 


12.4 

1963 


111,314 

11,999 


10.8 

1962 


106,830 

10,381 


9.7 

1961 


97,802 

9,284 


9.5 

1960 


92,230 

7,744 


8.4 

1959 


92,111 

5,806 


6.3 

1958 


82,575 

4,991 


6.0 

1957 


76,748 

4,462 


5.8 

1956 


70,461 

3,446 


4.9 

1955 


68,503 

3,308 


4.8 

1954 


71,138 

3,148 


4.4 

1953 


76,769 

3,101 


4.0 

1952 


67,962 

1,816 


2.7 

1951 


45,797 

1,301 


2.8 

1950 


43,147 

1,083 


2.5 

1949 


40,570 

1,082 

• 

2.7 

1948 


36,493 

855 


2.3 

1947 


36,931 

900 


2.4 

1946 


61,738 

918 


1.5 

1945 


95,184 

1,591 


1.7 

1944 


93,956 

1,377 


1.5 

1943 


78,909 

602 


0.8 

1942 


34,500 

280 


0.8 

1941 


13,980 

198 


1.4 

1940 


9,589 

74 


0.8 

See next 

page for 

notes. 





82 




ACDA/E-156 


Beginning in fiscal year 1953 amounts for expenditures include pay 
and allowance of military personnel in research and development. 

^’’Outlays" include expenditures plus net lending. Data through fis¬ 
cal year 1953 are in terms of the "Consolidated Cash Statement" and data 
beginning with fiscal year 1954 are in terms of the "Unified Budget." 

For purposes of providing trend information the data are considered to 
be reported on a generally comparable basis. 

c 

These estimates are based on amounts shown in The Budget, 1970, 
subject to subsequent administrative action. Data for 1970, moreover, 
do not reflect congressional action. 

NOTE: Data for fiscal year 1952 and subsequent years are based on sur¬ 
veys of the National Science Foundation. Prior data were prepared by the 
Bureau of the Budget. Since the NSF surveys began, agencies have sub¬ 
mitted revised data when necessary to maintain historical comparability 
with reporting practices of the latest period. 

SOURCE: National Science Foundation, Surveys of Science Resources Series 
NSF 69-31, Federal Funds for Research, Development and Other 
Scientific Activities, Fiscal Years 1968, 1969, and 1970, Vol. 

XVIII (Washington: Government Printing Office, August, 1969), 
p. 3. 






ACDA/E-156 


TABLE 13 

Total Inductions of Selective Service Registrants to Meet 

Requisitions of the Armed Forces 


CALENDAR YEAR 

ANNUAL TOTAL 

MONTHLY AVERAGE 

1969 

283,586 

23,632 

1968 

296,406 

24,701 

1967 

228,263 

19,022 

1966 

382,010 

31,834 

1965 

230,991 

19,249 

1964 

112,386 

9,366 

1963 

119,265 

9,939 

1962 

82,060 

6,838 

1961 

118,586 

9,882 

1960 

86,602 

7,217 

1959 

96,153 

8,013 

1958 

142,246 

11,854 

1957 

138,504 

11,542 

1956 

152,450 

12,704 

1955 

152,777 

12,731 

1954 

253,230 

21,103 

1953 

471,806 

39,317 

1952 

438,479 

36,540 

1951 

551,770 

45,981 

1950 

219,765 

43,953 


(Augus t-December) 


SOURCE: Annual Report of the Director of Selective Service , 1967, 
pp. 85-86; Semi-Annual Report of the Director of Selective 
Service, for the Period July 1 to December 31, 1967 , p. 37 
and Selective Service System, Selective Service News , 

Vol. XX, No. 3 (March, 1970), p. 2. 


84 












Federal Government Purchases of Gdods and Services, National Defense 
(annual rates, seasonally adjusted, billions of dollars) 


ACDA/E-156 




o> 










cx 

st 

NO 

CM 







g 

• 

• 

• 

• 






cd 

pH 

O 

CM 

rH 






jg 

+ 

+ 

I 

i 






o 










a* 

CM 

m 

st 

NO 






i r 

• 

• 

• 

• 




- 


ON 

ON 

ON 

00 

r>. 






i —1 

st 

St 

st 

-t 







</> 









a) 










bC 

o 

m 

00 

CM 






g 

• 

• 

• 

• 






cd 

pH 


CM 

CO 






,G 

o 

+ 

+ 

+ 

+ 






CM 

m 


o 

m 






m 

• 

• 

• 

• 






ON 

CM 

m 


00 






rH 

»t 

*t 

St 

st 







•CO¬ 









a> 

ON 

rH 

o 


Q) 





oc 

• 

• 

• 

• 

CX 

m 

CO 


00 

G 

o 

NO 

St 

pH 

G 

• 

• 

• 

• 

cd 

st 

CM 

CM 

rH 

cd 

o 

rH 

CM 

CM 

6 

+ 

+ 

+ 

+ 

x: 

o 

+ 

i 

+ 

1 

pH 

rH 

St 

r- 

rH 

m 


CM 

CM 

rH 

m 

• 

• 

• 

• 

m 

• 

• 

• 

• 

ON 

St 

O 

r*. 

CM 

ON 

00 

00 

ON 

00 

rH 

CM 

co 

CO 

St 

rH 

CO 

CO 

CO 

CO 


</> 





</> 




<u 


00 


St 

Q) 





cx 


• 

• 

• 

tx 

r>. 

St 

o 

m 

G 

1 

o 

CM 

O 

^5 G 

• 

• 

• 

• 

cd 

1 


pH 

CM 

cd 

NO 

m 

m 

CO 

6 

+ 

+ 

+ 

.G 

O 

1 

i 

i 

1 

O 

«n 

NO 

CM 

*H 

■< 

st 

St 

o 

ON 

m 

m 

• 

• 

• 

• 

in 

• 

• 

• 

• 

ON 

CM 

CM 

St 

r^. 

ON 

St 

CM 

ON 

00 

rH 

iH 

»H 

rH 

rH 

i—I 

St 

st 

CO 

CO 


</> 





</> 




U 





u 





a) 




■ t 

a> 





4J 

M 

M 

M 

> 

4J 

M 

M 

HH 

> 

M 


M 

M 

M 

U 


M 

M 

w 

cd 



M 


cd 



M 


3 





3 





O 





a 






85 







TABLE 14 (continued) 


* 


) 

ACDA/E-156 


« 


0( 

m 

rs 

rs 

oo 

s* c 

• 

• 

• 

• 

cd 

nO 

CM 

rH 

CM 

43 

u 

+ 

+ 

+ 

+ 


rs 

ON 

oo 

O 

rs 

NO 

• 

. 

• 

• 

ON 

ON 

H 

m 


r—t 

nO 

rs 

rs 



•CO- 





• * 


0) 





<U 




oc 

CO 

00 

CM 

NO 

OC 

NO 

rH 


c 

• 

• 

• 

• 

d* C 

• 

. 

• 


in 

m 

00 

m 

cd 

Q 

CO 

rH 

43 

+ 

+ 

+ 

+ 

43 

+ 

1 

1 

o 





CJ 




vO 

CO 

m 

CO 

NO 

o 

CO 

00 

00 

nO 

• 

• 

• 

• 

rs. 

• 

. 

• 

ON 

in 

00 

co 

m 

ON 

ON 

NO 

in 

iH 

m 

m 

NO 

NO 

rH 

rs 

IS. 

is. 


CO- 





-to¬ 


\ 

0) 





4) 




0C 

NO 

CM 

00 

00 

OC 

rs 

ON 

St 

X (3 

• 

• 

• 

• 

s* c 

• 

• 

• 

cd 

o 

H 

rH 

«<r 

cd 

O 

o 

CM 

6 

i 

+ 

+ 

+ 

6 

1 

1 

+ 

m 

NO 

CM 


m 

ON 

NO 

ON 

00 

nO 

• 

• 

• 

. 

NO 

• 

• 

• 

ON 

CO 

ON 

O 

CM 

ON 

00 

rs. 

ON 

H 


st 

in 

m 

*H 

rs 

rs 

rs. 


co- 





•co- 



0) 





4) 




oc 



00 

00 

0< 

rH 

O 

O 

a* a 

1 

• 

• 

• 

x a 

. 

• 

• 

cd 

1 

? 

rH 

tH 

cd 

CM 

CM 

rH 

s: 

i 

1 

43 

+ 

+ 

+ 

o 





u 





in 

rs 

00 

ON 

00 

CO 

oo 

NO 

NO 

• 

• 

• 

. 

NO 

• 

• 

• 

ON 

o 

O 

ON 

00 

ON 

NO 

rs 

00 

rH 

m 

m 



rH 

rs 

rs. 

rs 


</> 





o> 



M 









0) 





4) 




44 

M 

M 

M 

> 

44 

M 

M 

M 

M 


W 

M 

M 

H 


M 

M 

cd 



M 


<d 



M 

5 





§ 






00 

00 

rs 


? 


CM 

ON 

rs 



86 


SOURCE: United States Department of Commerce, Bureau of the Census, Defense Indicators 
Series ES4, No. 68-3 (August, 1968), p. 19 and No. 70-8 (August, 1970), p. 13 
Survey of Current Business , Vol. 50, No. 11 (November, 1970), p. 10. 








ACDA/E-156 


CD 

OC 

c 

CO 

A 

CJ 


co 


? 



CO o 

• • 
rH co 

I I 


uo 


w 

rJ 

5 

H 


TJ 

O 

•H 

V-i 

(1) 

P-. 


4-4 

O 

CO 

03 03 
fi C 
W to 
co 

< o 
x: 
•* u 

M C 
CO *H 
■U 


rH 03 
•H <D 

£ ^ 
CO 
•* 3 

M T-> 

0) 03 
& CO 
O 

a >> 

C rH 
CO rH 
£ CO 

c 

AJ O 
C CO 

a> co 
S <d 

•U CO 

<o u 
a o 
a) a 

Q w 


a> 

co 

3 

a) 

4-4 

a> 

Q 


co 

00 

UO 

ON 

CO 

m 

rH 

UO 

o 

O 

on 

m 

UO 

m 

>3- 

rH 

co 

CO 

co 

CO 

CD 

rH 

rH 

uo 

rH 

00 

• 

• 

• 

• 

C 

vO 

rH 

rH 

CM 

CO 

+ 

i 

i 

1 

jc 



CJ 

• 




CM 

uo 

vO 

CO 

r>- 

m 


CO 

00 

O 

ON 

vO 

vO 

in 

uo 

r—1 

CO 

CO 

CO 

CO 

CD 

r^. 

r^. 

ON 

vO 

oo 

• 

• 

• 

• 

a 

uo 

ON 

CO 

CM 

cO 

CM 

+ 

+ 

+ 

X 

+ 




CJ 





rH 

CM 

ON 

VO 

U0 

m 

vO 


r*- 

vO 

ON 

ON 

CM 

co 


*H 

CM 

CO 

CO 

CO 

CD 


ON 


00 

OC 


• 

• 

• 

c 

1 

o 

ON 


cO 

1 

1 

CM 

CM 

X 



+ 

+ 

CJ 





o 

'tf 

o 

ON 

r- 

m 

r>- 

vD 

00 

uo 

ON 

<r 

<r 

00 

CO 

rH 

rH 

rH 

rH 

CM 


<u <f 

oc • 

^ C CM 

CO I 
X 
CJ 


m 

m 

I 


rH in 

• • 

O rH 

I I 


UO 

uo 

U0 

rH 

r- 

UO 

O 

CO 

CO 

00 

ON 

rH 

ON 

ON 

oo 

rH 

CO 

CM 

CM 

CM 


CD 

00 

e 

eO 

X 

o 


00 

• 

iH 

I 


CM 





I 


o 

• • 

O CO 

I I 



CM 

CM 

O 

rH 

uo 


O 

00 

00 

ON 

CO 

CO 

CM 

rH 

rH 

CO 

CO 

CO 

CO 



87 




TABLE 15 (continued) 


ACDA/E-156 


o 

od 

^ g 

G 

43 

o 


0) 
od 
fr* c 
to 
43 
U 


CM 


r—( 

+ 


-O' 

o 

I 


* CM 


r- 

rH 


CM 

00 






vO 

r*- 


rH 

ON 






ON 

CO 

CO 

St 

co 






rH 

CO 

CO 

CO 

CO 






<D 

ON 

CM 

-O' 

CM 

<D 

00 

-a- 

r-- 


OD 

• 

• 

• 

• 

0C 

• 

• 

• 


8*8 G 1 

CO 

-O' 


CO 

*8 G 

CO 

CO 

CM 


(0 

+ 

+ 

+ 

+ 

G 

1 

1 

1 


43 





43 





O 





«J 













a 


vO 

ON 

st 

ON 

St 

O 

co 

vO 

St 


vO 

VO 

ON 

CM 

co 

r- 

r-» 

vO 

00 


Ov 

ON 

o 

CM 

CO 

ON 

rH 

O 

ON 


rH 

CM 

CO 

CO 

CO 

rH 

CO 

CO 

CM 


<U 

vO 

CO 

VO 

ON 

<U 

co 

CM 

St 

st 

60 

• 

• 

• 

• 

oc 

• 

• 

• 

• 

8 s ? G 

o 

p 

CM 

st 

8*8 G 

rH 

p 

o 

St 

to 

1 

4* 

+ 

+ 

G 

+ 

+ 

1 

1 

43 





43 





U 





C_> 





m 

r-. 

uo 

st 

I s *- 

ON 

CM 

o 

ON 

00 

vO 

st 

m 

CM 

«n 

vO 

m 

vO 

St 

ON 

ON 

vO 

vO 

p-. 

00 

ON 

St 

St 

St 

CM 

rH 

CM 

CM 

CM 

CM 

rH 

co 

co 

CO 

CO 


CM 

• 

O 

I 


o 


0) 
ool 
X g 
<0 
43 


St 

co 

r- 

o 

CO 

00 


r-. 

O 

00 

VO 

ON 

00 

ON 

VO 

VO 

vO 

st 

ON 

o 

ON 

VO 

vO 

vO 

vO 

ON 

st 

m 

-O' 

st 

rH 

CM 

CM 

CM 

CM 

•H 

co 

co 

t 

CO 

co 

U 





U 





0) 





<u 





H 





4J 





H 

w 

M 

M 

> 

M 

M 

M 

M 

> 

G 


M 

►H 

M 

G 


M 

H 

*H 

3 

O' 



M 


3 



HH 



o 

CM 

+ 


CO 

CM 

+ 


vO 


co 

• 

CM 

I 


io 

u 

to 

g 

•H 

8 


<1) 

U 

a 

co 

a> 

u 

o 

g 

0) 

TJ 


88 


SOURCE: United States Department of Commerce, Bureau of the Census, Defense Indicators 
Series ES4, No. 68-3 (August, 1968), p. 34 and No. 70-11(November, 1970), p. 2 








Defense Department Manpower, Civilian, End of Period 
(not seasonally adjusted, in thousands) 


ACDA/E-156 


d) 

tn 

CM 

CO 

rH 





OG 

• 

• 

• 

• 





if* C5 


<r 

CO 

CO 





to 

+ 

i 

1 

1 





X 









o 









CO 

o 

CM 

00 

00 





m 

ON 

CO 

00 

<f 





ON 

CO 

CO 

CM 

CM 





rH 

rH 

rH 

rH 

rH 





CD 

r>» 

00 

f". 

CM 





00 

• 

• 

• 

• 





C 

rH 

CM 

o 

Q 





to 

+ 

4* 

1 

+ 














CJ 









CM 

o 


00 

O 





m 

o 

CO 

CM 

CO 





ON 

CO 

co 

CO 

co 





rH 

rH 

rH 

rH 

rH 





0) 

<r 


rH 

CO 

0) 

rH 

m 

VO 

(30 

• 

• 

• 

• 

0G 

• 

• 

• 

C 

vO 

r^. 

CM 

rH 

e 

Q 

p 

o 

cd 

rH 

+ 

+ 

+ 

to 

+ 

+ 

1 

ja 

+ 




x: 




u 





u 




rH 

o 

m 

rH 

00 

m 

rH 

r- 

o 

in 

m 

CO 

SO 

C". 

m 

00 

00 

00 

On 

rH 

CM 

CM 

CM 

ON 

rH 

rH 

rH 

r—1 

iH 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

0) 


CO 

o 

CO 

0) 

ON 

CM 

<r 

(JO 


• 

• 

• 

oc 

• 

• 

• 

e 

1 

rH 

o 

ON 

6^5 C 

iH 

rH 

CM 

to 

1 

+ 

CM 

+ 

CO 

1 

i 

1 

.fl 



+ 


x: 




CJ 





o 




o 

CO 

co 


00 

Mf 

<f 

ON 

O 

m 


m 

o 

00 

m 

CM 

o 

00 

ON 



ON 

ON 

ON 

CM 

CM 

rH 

r— j 





rH 

rH 

rH 

rH 

M 





u 




<D 





CD 









u 




M 

M 

M 

w 

> 

u 

M 

M 

M 

cO 


IH 

w 

w 

CO 


IH 

M 

II 



M 


0 

O' 



M 


89 


/ 


1180 0.0 1167 -1.1 





TABLE 16 (continued) 


ACDA/E-156 




0) 

rH 

00 

CM 

CM 








CM 

OC 

• 

• 

• 

• 







0k 

CM 

d 

CO 

CM 

CM 

O 







CO 


c0 

+ 

+ 

1 

. 1 








• 

JG 











o 

Du 

e> 











4-» 












co 

0k 












o 

/"~N 












*H 

o 













is 












a 

ON 

rs 

00 

CO 

'4' 

rH 




• 



M 

rH 

vO 

v£> 

o 

rs 

rs 







0) 


on 

CM 

co 

CM 

CM 







0. 

rH 

rH 

rH 

rH 

rH 







CO 

d 

<D 

U 

<0 

.O 












VM 

e 












a) 

a) 












Q 

o 

0) 

ON 

vO 

o 

ON 

<D 

o 

m 

rH 




oc 

• 

• 

• 

• 

OC 

• 

• 

• 



* 


c 

CM 

St 

>o- 

CO 

d 

CO 

CM 

CM 



CO 

N-/ 

«0 

+ 

+ 

+ 

+ 

cO 

1 

1 

1 



3 







x: 






CO 

rH 

CJ 





cj 






d 

rH 











a> 

1 












cj 

o 













is. 












co 










a 




• 

vO 

00 

00 

St 

O 

o 

st 

sr 

ON 



4-> 

O 

vO 

00 

CO 

00 

co 


CM 

ON 

vO 




55 

ON 

o 

rH 

rH 

CM 

ON 

CM 

rH 

<H 



iw 


rH 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

rH 



O 

T> 













d 












3 

cO 












cO 













0) 

m 












u 

CO 

a> 

rH 

vO 

rH 

tH 

<U 

m 

ON 

St 

VO 


3 


00 

• 

• • 

• 

• 

oc 

• 

• 

• 

• 


CQ 

• 

d 

o 

rH 

rH 

rH 

a 

CO 

rH 

CO 

CM 



Dr 

co 

1 

+ 

+ 

+ 

cO 

+ 

+ 

1 

1 


* 


,c 





ja 






a> 

#N 

o 





u 






o 

/-N 












M 

00 












(0 

VO 












g 

ON 












g 

rH 












o 


m 

00 

St 

m 

rs 

ON 

rs 

CM 

vO 

CM 


CJ 

#v 

NO 

rH 

CO 

st 

m 

vO 

rH 

st 

ON 

vO 



4J 

On 

O 

o 

o 

O 

ON 

CO 

CO 

CM 

CM 


4-1 

00 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

rH 


o 

3 













00 












4H 

3 












d 

< 












0) 

6 

4H 

'-z 

a> 


ON 

St 

is 

a> 

St 

O 

rH 

CM 


00 

00 


• 

• 

• 

oc 

• 

• 

• 

• 


M 

1 

d 

I 

o 

O 

o 

fr* c 

o 

St 

CO 

O 


CO 

00 

CO 

1 

1 

1 

1 

cO 

1 

+ 

1 

1 


Cu vO 

rC 





-d 






(1) 


CJ 





CJ 






Q 

• 











So 


o 











u 

CO 

55 











CO 

<0 












C 

4-» 

•N 











•H 

cO 

St 

st 

ON 

o 

vO 

ON 

00 

vO 

is 

VO 

CO 

6 

■U 

CO 

vO 

CO 

CO 

CM 

rH 

VO 

vO 

rH 

is 

is 

•H 

CO 

w 

ON 

o 

o 

O 

o 

ON 

CM 

co 

CM 

CM 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

a) 

TJ 

CO 











u 

<0 

(1) 











Pu 

4-> 

•H 












•H 

H 











CO 

d 

CD 











<u 

3) 

CO 











u 













o 



U 





u 





G 

• • 


Q> 





0) 





a) 

w 


U 





U 






CJ 


u 

W 

M 

M 

> 

U 

(H 

W 

H 

> 



CO 


M 

M 

►H 

CO 


M 

M 

H 

— 

ZD 


3 



M 


3 



M 


JX 

o 


O' 





O' 






CO 



90 










Total Defense Expenditures Distributed According to Strategic or General Purpose Nature 

(billions of current dollars and percentage of total) 


ACDA/E-156 








rH 


m 

OS 

co 

rx 

rx. 

• 

• 

• 

• 

• 

os 

00 

Hi- 

CM 

m 

•sj- 

rH 

rH 

m 

rx 

CM 

rx 


</> 

i 




O 

rx 

co 

O 

Os 

rH 

rx 

• 

• 

• 

• 

• 

os 

rx. 

Os 

ix 

CM 

rx 

rH 

rH 

m 

rx 

CM 

ix 


</> 





os 

00 

so 


rx 

co 

VO 

• 

• 

• 

• 

• 

Os 

00 

o 

Os 

co 

SO 

rH 

rH 

vO 

rx 

CM 

Cx 


</> 





00 


rx 

»H 

CM 

00 

VO 

• 

• 

• 

• 

• 

OS 

SO 

O 

rx 

rH 

00 

rH 

rH 

so 

rx 

CM 

rx 


<J> 





rx 

rx 

rx 


O 

o 

VO 

• 

• 

• 

• 

• 

os 


00 

co 

o 

o 

r-t 

rH 

m 

rx 

CM 

00 


</> 





VO 

rH 

CM 

co 

SO 

<* 

SO 

• 

♦ 

• 

• 

• 

OS 

<r 

rH 

m 

rH 

00 

rH 

rH 

m 

so 

CM 

rx 


<J> 



8Hi 


in 

CM 

CM 


00 

CM 

so 

• 

• 

• 

• 

• 

os 

SJ* 

m 

OS 

00 

rH 

rH 

1—1 

co 


CM 

rx 


•CO- 






OS 

rx 

so 

00 

CM 

vO 

• 

• 

• 

• 

• 

Os 

vO 

<r 

rH 

CM 

rx 

rH 

rH 

co 

in 

CO 

sO 


•co¬ 





CO 

in 


OS 

rH 

Os 

SO 

• 

• 

• 

• 

• 

OS 

m 


OS 

rH 

00 

rH 

rH 

CO 


CO 

vO 


•co- 





CM 

CD 

CM 

CM 

CM 

00 

SO 

• 

• 

• 

• 

• 

OS 

00 

co 

rH 

m 

Mf 

»H 

rH 

co 

m 

co 

vO 


</> 

c» 



C0 



1 0) 



1 <U 



U O 



u a 



D u 



0 u 


O 

(U o 


o 

CH O 


•H C0 

Pu 


•H CO 

£*4 


00 0) 

rH 

<2 

oo a) 

rH 


a) o 

cd a) 

H 

0 ) o 

cd a) 


H H 

M CO 

o 

H u 

M co 


co o 

a) o 

H 

<d o 

<u o 


M Ui 

d a 


M Pm 

a a 


4J 

a) 


4J 

a) 


C/D 

O 


C/D 

o 


91 


SOURCES: See next page 





ACDA/E-156 


SOURCES: 





TABLE 17 (continued) 


Statement of Secretary of Defense Robert S. McNamara before 

the Senate Armed Services Committee on the Fiscal Year 1969- 

73 Defense Program and 1969 Defense Budget (January 22, 1968); 
Statement of Secretary of Defense Clark M. Clifford: The 

Fiscal Year 1970-74 Defense Program and 1970 Defense Budget 

(January 15, 1969); Statement of Secretary of Defense Melvin 
R. Laird before a Joint Session of the Senate Armed Services 

Committee and the Senate Subcommittee on Department of De¬ 

fense Appropriations on the Fiscal Year 1971 Defense Program 
and Budget (February 20, 1970). The calculations were done 
according to Schultze CCharles L. Schultze, et al ., Setting 
National Priorities: The 1971 Budget (Washington: The 
Brookings Institution, 1970), p. 19] as follows: The costs 
of the strategic nuclear forces are an aggregate of the 
strategic forces program, half of the intelligence and com¬ 
munications program, 40 percent of the research and develop¬ 
ment program, and a varying percentage of the support pro¬ 
grams (programs 7, 8, and 9). The costs of the general 
purpose forces are an aggregate of the general purpose forces 
program, half of the intelligence and communications program, 
the airlift and sealift program, the National Guard and Re¬ 
serve forces program, 60 percent of the research and develop¬ 
ment program, the support of ether nations program, and a 
varying percentage of the support programs. 


92 

















ACDA/E-156 


THE IMPACT OF DISARMAMENT ON AGGREGATE 
ECONOMIC ACTIVITY - AN ECONOMETRIC ANALYSIS 


Lawrence R. Klein and Kei Mori 


Econometric models are used for the analysis of a wide variety of 
public policies or contingent events. Historical simulations have been 
made of the 1964 income tax cut, the 1965 excise tax cut, open market 
operations, changes in the discount rate, in government expenditure, 
in tax schedules, etc. In the present paper, we use the Wharton- 
Econometric Forecasting Unit Model to analyze different degrees of dis¬ 
armament in the United States in much the same way that these other 
government acts or policies have been analyzed. 


Disarmament, in general, or the economic consequences of a^peaceful 
settlement in Vietnam have been examined in previous studies. We 
approach the issue anew in the present series of calculations and com¬ 
bine both ceasefire (or peace settlement) in Vietnam, under present 
conditions, and some general limitation on strategic weapons. 


1 L. R. Klein, "Econometric Analysis of the Tax Cut of 1964," in 
James S. Duesenberry, et al . (eds.). The Brookings Model: Some Further 
Results (Chicago: Rand McNally, 1969), pp. 459-472. 

2 Gary Fromm and Paul Taubman, Policy Simulations with an Econo¬ 
metric Model (Washington: Brookings Institution, 1967). 

3 M.K. Evans and L. R. Klein, The Wharton Econometric Forecasting 
Model (Philadelphia: University of Pennsylvania, Economic Research 
Unit, 2nd enlarged edition, 1968). 

^L. R. Klein, "Economic Consequences of Vietnam Peace," Wharton 
Quarterly (Summer, 1968), pp* 20—23j and Daniel B. Suits, Econometric 
Analysis of Disarmament Impacts" in Emile Benoit and Kenneth E. 
Boulding (eds.) Disarmament and the Economy (New York: Harper & Row, 

1963). 



93 













ACDA/E-156 


III.l THE MEANING AND USES OF AN ECONOMETRIC MODEL 

An econometric model of the U.S.A. is a system of mathematical- 
statistical equations that interrelate the main economic magnitudes of 
the country. The equation system is nonlinear and dynamic. It is 
capable of generating its own*, movement through time if given an initial 
impetus. It is an open system, being subject to external random dis¬ 
turbances and imposed values of variables related to public policy con¬ 
trol. The variables representing the activities of the military 
establishment are among the set of exogenous variables that "move" the 
system. 

The coefficients of the equation system are assigned numerical values 
so that the equations reproduce as closely as possible the actual work¬ 
ings of the economy in an historical period. In other words, we fit 
theory to the facts, and choose, in some sense, the best fitting sta¬ 
tistical system of equations. 

The particular econometric model used in this study, the Wharton-EFU 
Model, consists of 51 statistical equations plus some twenty definition¬ 
al or accounting relationships (with known coefficients). The underly¬ 
ing sample of observed data is quarterly, covering the entire period 
since 1948. This model is used regularly in forecasting aggregate 
economic movement in the U.S.A. in cooperation with participating 
business corporations and public agencies. Every quarter, the model is 
projected ahead for eight quarters, and this application has been going 
on for more than seven years. There is nothing fixed about the eight 
quarter forecasting horizon, but this is a well-considered limitation 
on the time span for which moderately good accuracy of prediction can 
be expected. In order to analyze public policies, especially those 
that require more time to work out, we do project solutions of the 
iiodel over a longer time span. The calculations of this paper are 
extended as far forward as the fourth quarter of 1972. 

As mentioned above, an econometric model is a set of simultaneous 
mathematical-statistical equations that express the interrelationships 
of an economy. The relationships that are interconnected in such a 
system are often classified as: 

(i) Behavioral equations 

(ii) Technical equations 

(iii) Legal restrictions 

(iv) Accounting identities 

The behavioral equations in (i) are reaction patterns of consumers, pro¬ 
ducers, trade unions, and market traders. In economic analysis, these 
relationships are.known as the propensity to consume, the propensity to 


94 


ACDA/E-156 


invest, wage rate determination equations, price formation equations, 
demand equations for cash balances and the like. 


Technical equations (ii) are production functions or input-output 
relationships. They show how the system 1 s physical inputs are trans¬ 
formed into physical outputs. 

The legal restrictions (iii) are the tax laws, bank reserve require¬ 
ments, rules for unemployment compensation, regulations for welfare 
payments, tariff rates, farm price support rates and other statutory 
provisions governing the economy. 

Finally, the accounting identities are the equations relating GNP, 
national income, personal income, and disposable income. They also 
include the stock-flow definitions between past investment and capital 
accumulation, equality between savings and investment, definition of 
the public deficit, and definition of the net foreign balance. 

In abstract form, an econometric model can be written as: 


f ±(y 


It’ 


y nt ; 


1, t-1* 


n, t-p ? ^lt’ X mt^ ~it 

i*" 1. J • ft • y n ^ I 2 ^ ft • • y 


The f. functions are the above mentioned interrelationships (i-iv) of 
the system. The variables y^ t , ..., y nt are endogenous variables. 

They are price changes, interest rates, expenditures, and other current 
decision variables. They are generated by the system. To make the 
system dynamic and to show the cumulative effect of time delays and 
historical forces, we also include previous values—up to p quarters 
ago. These are expressed by 


y 



t-1’ 



t-1’ 


y n, t-l ; y l, t-2’ y 2, t-2’ 



t-2 


9 


y 9 y , ... , y . These are lagged endogenous variables. 

Next, we have exogenous variables, x^ t , •••* x m t* They include public 

expenditures, open market operations, discount rate, world trade, and 
other variables external to the system. Note that there are n equations 
in the system and n endogenous variables. There are m exogenous 
variables. Finally, we denote the random disturbances by e lt> ..., e^. 

An econometric system is necessarily stochastic. There are omitted 
variables, approximate relationships, and random disturbances from 

outside. 


95 






ACDA/E-156 


If we have estimates of the parameters of the f^ - functions on 
the basis of historical sample data, we can use the system 




f. = 0 
1 


i ■ 1,2, .. .n 




for estimating each y^, given ^ and for period t. We set 

the errors equal to zero for these applications of the model because 

that is their average value. If we have any special, non-statistical 

knowledge about the appropriate values for particular random disturbances 

(e. ) other than zero in any particular period, we occasionally use such 
it 5 

values instead of assuming that all the e^ vanish. Also, it should 

be pointed out that values of y. , may be assumed to be given only 

i j 

at the beginning of an application, for such lag values are developed 
in successive time periods as future inputs on the basis of the dynamic 
evolution of the model; therefore we merely assume that initial values 
of y are given, together with values of the x over the whole 

l, t—j it 

period of application. 


Specific economic policies are defined in terms of given sequences of 
values for x^ t over a period of application. Policies may also be 
described in terms of values for some parameters of the f^ - functions, 
namely, those that are subject to direct control of public authorities. 
Thes^e include such things as tax rates, reserve requirements against 
bank deposits, tariffs, exchange rates, social insurance benefit rates, 
etc. The major policy decisions represented by the exogenous variables, 
x^ t , are government expenditure levels (by type), open market operations, 

the discount rate, transfer payments, public employment levels, etc. 

The usual procedure for studying economic policies of impact effects 
of major events is to develop two or more dynamic solutions to an 
equation system. One solution is called the control solution, and the 
others are disturbed solutions. The control solution is a base-line 
calculation, used as a reference position, usually representing the best 
considered judgement about input values for x. t and policy parameters. 

The disturbed solution gives the time path of the economy in its 
various dimensions as a result of altering policy or other inputs. 

These alterations may be complicated in that they assume many things to 
change simultaneously at particular time points. A comparison of a 


To cope with the problems of data revision that are constantly 
occurring in the realm of social statistics, we re-estimate our models 
from time to time. For interim purposes, between data revision periods, 
we often assign non-zero values to the e^ . 


96 








ACDA/E-156 


disturbed with a control solution is a generalization of the concept 
of a multiplier in which the change in one solution (y^ — y9^_) is 


d it: 

compared with the associated change in one input (x. - ), where 

j ^ j1 


multiplier = — 


y it - 


it 


c 

X,. ~ X ‘4- 
jt Jt 


The new approach is a generalization not only in the sense that the 
’’package” of changes can be made more complicated, but also in the 
sense that the change process can be followed through time. We, therer 
fore, have dynamic multipliers or their generalized equivalents. 


In using the Wharton-EFU Model in the present studies of disarmament, 
we try to translate reductions of military expenditures and personnel 
into combined, balanced changes in a number of exogenous variables over 
the forecast horizon of the solution. Government purchase of goods and 
services for defense, government wage payments, and the military labor 
force are all explicit model variables. In addition, we consider 
various compensatory programs in the civilian sector of the economy 
and these are represented by corresponding changes in nonmilitary expend¬ 
itures, tax rates (parameters of "legal restrictions"), and instruments 
of monetary policy—unborrowed reserves of the banking system and the 
Federal Reserve discount rate. 

Much attention centers on the solutions for total production and 
unemployment in the economy when various disarmament programs are 
followed. Although the Model is highly interrelated and cannot be 
readily described in all 70-equation detail, the major lines of 
causation for the determination of production and employment can be 
indicated. The equations of the Model build up total demand for goods 
and services in the economy from relationships of consumption, capital 
formation, public expenditures and net exports. This buildup of 
demand must be simultaneously supported by a flow of aggregate income. 
These balancing flows of total demand and income determine aggregate 
production, known as Gross National Product (GNP). To meet this level, 
of GNP, an aggregate labor input is required which yields the required 
employment figure. Against the level of employment required, we con¬ 
sider the labor force available. Labor force, itself, varies with the 
state of the economy in the Model. Labor force minus employment gives 
unemployment, as one of the identities or definitional equations of the 
system. Labor force and employment must include farm workers, farm oper¬ 
ators, other self employed persons, government civilian employees, and 
military personneL It is evident that demobilization policies that 
accompany disarmament programs leave many servicemen in the labor force. 


t 


97 




ACDA/E-156 


switching them from a military to a civilian category, without immedi¬ 
ately placing them all in civilian jobs. This is the crux of the un¬ 
employment problem in our calculations. There is a further impact on 
production and indirect effects on employment. These, too, are. allow- 
ed for in the Model solution. 

The Model makes direct calculations of labor force and employment. 
Unemployment is a residual estimate. It is also quite small, something 
under 10 percent. These two features of the unemployment statistics, 
its residual character and its small size, introduce uncertainty into 
its estimation. Errors in labor force and in employment projections 
may be reinforcing and cause unemployment projections to be less reliable 
than many other economic magnitudes. When compared to its small size, 
the errors may appear to be large. 

The Model generates solutions for other variables besides measures 
of aggregate economic activity. It produces estimates of price levels, 
interest rates, and wage rates. 


III.2 THE ECONOMETRICS OF DISARMAMENT-CONTROL SOLUTION 

First we must describe our control solution. It is the September, 

1970, control solution of the Wharton-EFU Model, extended beyond the 
usual cut-off period of 8 quarters, to go through the calendar year, 

1972. It is thus a 10 quarter projection. In this solution we have 
assumed that the war in Vietnam continues indefinitely but at a slacken¬ 
ed pace as far as U.S. military expenditures and armed forces are con¬ 
cerned. It represents, essentially, a policy of "Vietnamization." 

We have allowed for the 1970 pay increase of government employees, but 
otherwise assumed that recent declines in defense expenditures will 

continue until the armed forces decline from the present level of 3.14 
million men to 2.7 million by the end of 19^2. State and local govern- ” 

ment expenditures are assumed to rise first by $2.0 billion per quarter, 
increasing to $3.4 billion per quarter, then falling back to $2.5 
billion pqr quarter. Federal civilian expenditures are also assumed 
to rise gradually, in addition to the pay increases. Additional pay 
increases are built into the assumed path of government expenditures. 
Federal, state, and local. Total expenditures in current and constant 
dollars are shown quarterly over the solution period in Table 1. 

World trade is projected smoothly and steadily upward, but at a 
slower rate than in recent years. Farm income is assumed to decline 
slightly during the latter half of 1970 and then remain level for the 
rest of the projection period. The major unusual assumptions that must 
be built into the control solution and the related disarmament simulations 
of the Model are those associated with initial conditions at the time 


98 





Control Solution with Major Assumptions 


ACDA/E-156 


co 

O 

on 

m 

CM 

ON 

O 

m 

*H 


. 

• 

• 

• 

• 

• 

• 

• 


rH 

st 

m 

H 

rH 

CO 

m 

O 

rH 

ts. 


CM 

CO 

CO 

st 


TO 

m 

on 

T—1 



rH 

CM 

rH 



CM 


CM 

m 

rH 

vO 

O 

rH 

O 

m 

st 


• 

• 

• 

• 

• 

• 

• 

• 


rH 

CO 

m 

00 

rs. 

CO 

m 

ON 

00 


r*s 

CM 

CM 

CM 

st 


CM 

st 

ON 

rH 



rH 

CM 

rH 



CM 


rH 

O 

rs 

CM 

00 

O 

o 

m 

00 


. 

• 

• 

• 

• 

• 

• 

• 


rH 

st 

st 

m 

CO 

CM 

m 

00 

m 

rs- 

rs 

CM 

CM 

CM 

st 


CM 

st 

ON 

rH 



rH 

CM 

rH 



CM 


st 

m 

CO 

rs 

St 

St 

O 

m 

CM 


• 

• 

• 

• 

• 

• 

• 

• 


O 

si¬ 

St 

CM 

rH 

rH 

m 

00 

CM 

r-s 

rs. 

CM 

CM 

CM 

St 


CM 

St 

ON 

rH 



rH 

CM 

rH 



CM 


CO 

O ON 

rs vo 

CM 

m 

rs 

vO 


# 

• • 

• • 

• 

• 

• 


o 

m co 

O ON 

rH 

m 


ON 

rs 

rs cm 

CM rH 

St 


CM 

CO 

ON 

rH 

</> <J> 

rH CM 

</> </> 

rH 

</> 


</> 

CM 


00 

m 

a\ 

rH 

CD 

Q) 4-1 

U OX 

d cd <U 




4-» 





CO 



CO 

T) 




*H 

0) 




d 

CO 


a) 

cd 




TJ 

CO 


n 


o 

Hi 

rs 

> 

M 



U 

C 

d 



*H 

cd 

6^ 

u 

H 



<u 

a) 

a) 

rH 

a 


r—1 

rH 


CU 




4J 

a 

4-1 

cd 

Q 


rH 

rH 


CO 

od 



M 


<y 

H 

X 


•H 

o 

a) 

cu 

rH 



cd 

w 

Q 

a) 



X 

Td 

4J 

05 

Hi 

o 

CO 

& 



'd 

'Td 




cd 


O 

o 

a 

4-» 

rH 

CU 

a 





Tl 


rH 

o 

*H 

"d 

d 

5 

cd 

a 

P4 

cd 

rH 

cd 



4J 

CU 

4-1 


4-1 

d 

0 

o 

u 

CU 

•U 

4J 


d 

O 

O 

.. 


cd 

d 

•H 

<U 

4J 

o 

o 


d 

U 

X 

00 



U 

4J 

X 

cd 

H 

H 


o 

u 

m 


u 

<U 

cd 

u 

4-> 




o 

o 

<U 

ON 

CO 

cd 

> 

53 

o 

CO 




CO 

X 

T3 

rH 

-2 

a) 

Q 







•H 

d 

a 

N-X 

>■« 

0 







Q 

D 

H 



-u • 

£ 8 

O 


o 

• 

vO 


m 

• 

rH 


o 

• 

rH 

4.52 

vO 

00 

8.10 

4J 

cn cd 
CU Hi 
> <U 

rH 


St 


m 


CO 


W IM 

(U o 



O 


rs 


rH 




rH 






CO 

a) jj 









*.3 






rH 


fs. 

od u 
a) eg 
u Q 

O 


St 


o 

rH 

m 

rH 

vO 

rH 


3 

O 

rH 


CM 

m 

rs 

• 

St 

rs. 

CO 

rH 

00 

•H 

d d 
u 4 <u 
a) a 

05 O 
II 

co a> 









g £ 






VO 


st 

is cu 
a) co 

O 

• 


rH 

• 


CM 

• 

00 

• 

m 

• 

CM 

• 

vO 


rH 


o 

St 

vO 

00 

co a) 
a) o5 
05 

rH 
Td cd 

rH 


rH 


st 


CO 




O 

rH 


rs 


rH 










0) M 
> a) 
O TJ 









Hi a) 






vO 


CO 

Hi Ph 

O 

• 


VO 

• 


m 

• 

CM 

• 

CM 

• 

CO 

• 

U 

vO 


St 


CM 

m 

VO 

00 


rH 


00 


CM 


CO 





ON 


rs 


rH 


>s d) 









H rH 
*H rH 









H O 









d Hi 
CU 4-1 

CO 


St 


00 

vo 

o 

CM 

CM 

st 

T) d 
•H O 
O 

vO 


CO 


vo 

m 

m 

00 

0) 

jd a) 

i 1 n 

rH 


00 


CM 


CO 




ON 


rs 


rH 


4J JO 

</> 


</> 


■CO* 




5n O 
-o H 









T> Tl 

cu ^ 









d 0 









*h d 

IH CD 





CO 

ll 




(U CO 





H 

cd 




nd cd 



■u 

4-> 

rH 

rH 

O 


o 

o 


are 

are 



o 

a 

Tl 

/S> 

rH 




d 

T3 

d 

T3 

00 

V 

• • 


CO to 

a) cu 
£: 



O 

U 

O 

M 

m 

ON 

a) 

00 

m 




PH 

PH 

rH 

4-> 

ON 


<U 

CO 

cu • 

Hi CO 
0) 

od > 
(U Hi 
^ CU 
O CO 

{a fll 






cd 

rH 




rH 

cd 

•d 

4-1 

O 

05 

W 

/s 



d 

d 


u 

o 

'w' 

92 


o 

o 

CO 

a 

X 


0 


•H 

•H 

d 

a> 

CU 

T> 

O 


4J 

4-> 

o 

P 

r 0 

rH 

O 

d 

cd 

cd 

•H 

>s 

d 

<U 

d 

o 

53 

25 

rH 

o 

M 

*H 

M 

♦H 



rH 

rH 


>* 

rn vu 
tj 


4J 

CD 

CO 

•H 

a 

CU 


A 

0 

d 

CO 

CO 

X 

0 

O 

-a 

JO <U 

d cu 

D Hi 
Cd pH 

c 

rH 

O 

o 

S-/ 

CU 

•H 

d 

cd 

O 

M 

u 


a 

U 

o 

PH 

CO 

CD 

O 


5 

PH 

PQ 


99 


These are values of a quantum index of world exports based on 1958: 100. It happens that the 

dollar valuation of world exports was close to the quantum index in 1969. Total world exports 
in this year were $226 billion in 1963 prices. 





ACDA/E-156 


3 

3 


o 


<r 

o 

ON 

O 

00 

m 

m 

o 

• 

• 

• 

• 

• 

• 

• 

• 

CM 


!■"* 

<r 

m 

00 

m 


r^- 


CM 

<r 

<r 

<r 


CO 

on 



rH 

CM 

rH 




o 


CO 

O 

m 

m 

00 

m 

m 

CM 

• 

• 

• 

• 

• 

• 

• 

• 

CM 

'<r 

r>» 

«H 

CM 


m 

CO 

r^ 

r^. 

CM 

<r 

'tf 

SJ- 


CO 

o\ 



rH 

CM 

rH 




tH 



O 

00 

O 

m 

rH 

00 

CO 

00 


• 

• 

• 

• 

• 

• 

VO 

vO 


rH 


rH 

r^» 

vD 

CM 

tH 

O 

rH 

rH 

00 

r-» 


<* 

rH 




o 

CM 

in 

CO 

CO 

rH 

00 

00 


• 

• 

• 

• 

• 

• 

CO 

VO 

CO 

<r 


rH 

r^. 

vO 

CM 

rH 

ON ’ 

o 

rH 

n- 

n* 


>d* 

rH 



£ 

3 

42 

44 

O 

a) 

tH 

a) 

£ 

u 

Ou 

3 

o 

X 

3 








O 





r^. 


CO 

CM 

O 

rH 

o 

00 

m 

m 


O 

rH 

rH 

r->- 

CO 

On 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

CM 

<r 


ON 

ON 

vO 

m 

CM 

O VO 


r>. 


o 

r>* 

r^- 


CM 

CO 

CO 

-d- 


CO 

VO rH 


vo 




on 



rH 

CM 

rH 



CM 

o 



rH 



T3 

S 

3 


g 

8 


CO 

U 

3 


o 

T) 

■u 

3 

a) 

M 

in 

3 








O 





CO 


00 

o 

tH 

o 


m 

O 

vO 

m 

vo 

o 

CM 

rH 

CM 

vO 

ON 

IM 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

9 

• 

• 

CM 


vO 

vO 

r^» 

m 

m 

rH 

vo 

ON 

00 

m 

On 

r^. 

o 


r^. 

CM 

CO 

CO 

<3- 


CO 

m rH 

m 

m 


CO 



ON 



rH 

CM 

rH 



CM 

o 



rH 


a) 


a) 

r*H 

■8 

H 


CM 


•H 

42 





O 

CO 

o 

rH 



m 

00 


O 


ON 


tH 

tH CO 

O 






• 


• 

• 

• 

• 


• 

• 

• 


• 


• 


• 

• • 

• 



3 



rH 


<r 

vO 





m 

O 


<f vO 


vD 


rH 

m on 

00 



•H 



r-* 



CM 

CO 

CO 




00 


m tH 


<r 


m 

CO 







ON 




rH 

CM 


tH 




CM 


o 


n* 

rH 







rH 













tH 







TJ 





</></></></> 


<f> 


•CO- 


<J> 


•CO- 


-co- 





3 






















• 

44 






















tH 























o 

3 






















44 

*r-) 






















3 

T3 


















/*N 




tH 

3 









00 









3 




44 










m 









M 




3 










ON 









3 




TJ 

rH 









tH 









tH 

o 




tH 




m 














tH 

o 



44 

3 




3 





44 







44 

44 

O 

tH 



3 

3 




u 





O 



42 



a 

O 

TJ 

/—N 



3 

O 




3 







3 

3 



P 

3 





-d 

eg 




44 





03 

/-N 


3 

3 



* 3 


00 

VH •• 



O 

3 





3 




3 

3 


3 

3 



0 

O 

m 

00 



U 

3 




'O 

eg 


tH 


O 

Jh 


> 

U 



tH 

V4 

ON 

3 m 


• 9 

PH 

3 



U 

a 

3 


3 


H 

3 


U 

H 



PH 

CH 

tH 

44 a\ 


/-N 



a) 

a) 

a) 

3 

o 


tH 

rH 

VH 

3 







3 tH 



tH 

3 



44 

04 

44 

Q 


tH 

tH 


3 

T) 



73 73 

4h 

03 ^ 


3 

3 

tH 



u 

K 

3 

U 

hJ 


H 

O 

3 

3 

rH 

8 


O 



3 

3 

3 



3 

w 

Q 

a) 



42 

Td 

44 

Pd 

U 


3 

3 


44 O 

NH 

3 

O 



0) 

3 



T3 

'O 




3 


o 

tH 3 


O 

O 

3 

3 X 


•H 

H 

3 


G 

O' 

44 


a) 

3 




« 

*3 


0 


*H 

H 

3 

3 3 

XJ 

44 

44 

3 

• 

O 


3 

PH 

3 

rH 

73 



3 


o 


44 

44 

O 

0 TJ 

rH 

3 

3 

•H 

•d 

H 

-3 

3 

3 



3 


44 

!* 

44 

•• a 

3 

3 

3 

*H 

5n 3 

3 

O 

25 

tH 

3 

44 

3 

s 

O 

tH 

3 

44 

44 


3 

O 

O 

oo 3 

O 

55 

23 

tH 

O H 

•H 

O 


3 

44 

t 

S3 

3 

H 

(1) 

44 

o 

O 


9 

M 

X 

m h 

*H 



tH 

tH 

rH 


3 

3 

3 


U 

44 

42 

3 

H 

H 


o 

tH 

ON 

44 

3 

3 

*H 

04 3 

3 

3 

O 

3 

u 

3 

3 

44 

44 




o 

o 

3 

rH 0 

3 

3 

3 

42 

0 O 


3 

O 

tH 

•H 

3 

3 

> 

55 

O 

CO 




3 

42 

'O 

' tH 

tH 

O 

O 


3 *H 

3 

44 

U 

rH 


% 

3 

S 







H 

3 

3 

3 

O 

tH 

tH 


3 tH 

O 

O 

O 


3 

>-• 







Q 

5 

M 

pH 

CO 

O 

O 


5o (X, 

PQ 

55 

a 

TJ 



100 











ACDA/E-156 


the projections are being prepared (September, 1970). The control 
solution was started from a situation in which a major strike was in 
force (General Motors Corp.) that has a clearly discernible influence 
on economic performance. Some dimensions of a 6-week strike are pro¬ 
grammed into these solutions causing a drop in purchases of autos and 
parts and nonmanufacturing inventories in the fourth quarter of 1970, 
followed by significant catch-up buying and re-stocking in the first 
half of 1971. In addition, the possible consequences of a steel labor 
settlement in summer, 1971, are programmed to allow for hedge buying 
of inventories during the first two quarters of 1971. This gives an 
initial "down-up” movement to the economy that is independent of the 
focus of this particular paper. The Model solutions return to standard 
growth paths by the end of 1971 after the effects of these two labor 
disturbances are worked off. 

The control solution reflects the policies that were instituted in 
1969 to slow down the economy and bring about a recovery later in 1970, 
with the above mentioned strike interruption. Right or wrong as a 
prediction of the precise course that the economy will follow until 
the end of 1972, it provides what seems to be a reasonable control 
solution for the present study. It is a solution that assumes a con¬ 
tinuation of the war with reduced level of military expenditures and 
manpower requirements. It does not assume a static military budget, 
but one that is capable of supporting a limited war effort and contem¬ 
plates little general disarmament. Various peace and disarmament 
policies, as well as an escalation type budget will be compared with 
this solution.^ The time path of the control solution in terms of lead¬ 
ing variables is given in Table 1. 

While the control solution consists of values for more than 75 
different variables, the selected ones summarized here give the flavor 
of the projected course of the economy over the next years. The 
stated objective of slowing down economic expansion through fiscal 
and monetary control, which took effect in mid-1969, produced a decline 
in real GNP for 1969.4 and a recovery or flattening out in 1970.2. 

From this point onwards, the economic expansion is projected to gain 
momentum again apart from labor troubles, but with declining real value 
of military expenditures and a lower military force. The unemployment 
rate is driven above 5 percent and then declines again. The rate of 


^Editor's Note: Annual rates of change of particular series have 
been treated as continuous rates in this paper. Hence, they will not 
in general be the average of .the quarterly rates. This also accounts 
for the slight variation between the military budget models of Professor 
W. W. Kaufmann described in.the Overview and Summary and those used in 

this chapter. 


101 




ACDA/E-156 


. 

inflation, measured by the GN7 deflator, shows some response to the de¬ 
flationary policies and gradually declines. While prices are not 
constant by 1971-1972, they are estimated to grow at a much smaller 
rate than at present. The strict monetary policy of 1969 causing high 
interest rates has been relaxed in this solution and interest rates 
gradually come down. The budget deficit of 1968 was turned into a 
surplus for 1969 by fiscal policy, but turned negative again in 1970 
and remains negative in the control solution. Net exports of goods 
and services, which fell below $2.0 billion (current prices) in the 
first half of 1969, recovered to values in excess of $4.0 billion by 
mid-1970 and remain firm with improvement throughout the solution 
period. 


III.3 THE ECONOMETRICS OF DISARMAMENT-POST VIETNAM SOLUTIONS 

Case 1. Budget D. In the midst of the fiscal year ending June 30, 1971, 
defense budgets and implied manpower programs are fairly well fixed for 
the last two quarters of 1970 and the first two quarters of 1971. We 
assume that the control solution patterns for exogenous inputs are given 
for that period and that an acceleration of disengagement follows, 
starting in 1971.3. This could be associated with a cessation of 
hostilities. 

Whereas the control solution projects a decline in defense spending 
to $74.0 billion in 1972.4, the Budget D case brings this total down to 
$70.4 billion. The size of the armed forces is not changed from the 
figure of 2.7 million men assumed for the control solution; so the lower 
spending total implies a different mix between men and material. 

Federal civilian spending and spending by state and local governments 
are fixed at the control solution values. The changes then are in 
military spending, alone. The monetary policy set for the control 
solution seems to be appropriate here. 

The acceleration of cutbacks in defense spending under this case, 
raise unemployment somewhat in 1972, after some improvement in 1971. 

At the end of the solution, unemployment stands near 4.5 percent. Some 
details of the calculation are given in Table 2. 

An appropriate fiscal offset to compensate for the cutback in 
military expenditures would seem to be increased Federal civilian spend¬ 
ing, reaching an increment of $4.3 billion over the control solution 
lead by 1972.4. This adds almost $1.0 billion to the Federal deficit, 
but moderates the rise in unemployment in 1972. The compensated pro¬ 
gram adds very little to the inflation rate according to the Model 
solution. The compensated levels of nondefense spending and results 
for a few leading variables are given in Table 2. 


102 






ACDA/E-156 


ro 

X 

ON 


CM 


r^ 

on 




O 


o 







CO 


o 


On 

rH 

VO 

vO 

rH 

o 


<3- 

rH 

ON 


in 

vO 

rH 

m 

© 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

ON 

O 


oo 

00 

CO 

m 

rH 

o 

o 

O 


oo 

oo 

vO 

CO 

LO 


CO 


n- 

CM 

CO 

CO 

-<r 

m 


CO 


CM 

o 



rH 




rH 

CM 

o 

r>- 


rH 



rH 









rH 








rH 









rH 


n- 



o 

X 

m 

rH 

m 

rH 

vO 

O 

mi- 

o 

rH 

m 

rH 

rH 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

Ml" 

CM 

Mi- 

r>- 

oo 

CO 

m 

00 


Mf 

CM 



00 

m 

CO 

m 


co 


r^» 

CM 

CM 

CM 

CO 

in 


CO 


CM 

O 

r>. 


rH 




rH 

CM 

o 



rH 



rH 









rH 







3 


CM 

co 

3 on 
X X 
0 
X 


HO 

a 

a) 


x 


CO 


r"» 

on 



vO 


<r 







vO 


Mf 


CM 

00 

m 

CM 

o 


CM 

00 

rH 

CM 

00 

m 

CM 


• 

• 

• 

• 

• 

• 

• 

• 

* 

• 

• 

• 

• 

. 

o 

mt 

vO 

00 

mt 

<f 

m 

CO 

rH 

O 

Mf 

vO 

oo 

Mf 

<* 


CO 


r** 

CM 

CM 

CM 

rH 

Mf 


CO 


CM 



i—1 




rH 

CM 

O 

r-* 


i—1 











rH 








o* 

X 




















X 

cd 





VO 


CO 








VO 


CO 



w 

rH 

Mf 


vO 

m 

CM 

CM 

CO 

m 

CO 


Mf 


vO 

in 

CM 

CM 

CO 

CO 



rH 

• 


• 

• 

• 

• 

• 

• 

• 

• 

• 


• 

• 

• 

• 

• 

• 


3 

o 

o 

ho 

Mi- 

CM 

m 

VO 

00 

Mf 

Mf 

CM 

rH 


Mf 

CM 

m 

vO 

oo 

Mf 


0) 

HO 

i"- 

3 

00 

CM 


CO 


n* 

CM 

CM 

CM 


00 

CM 


CO 


CM 


a 


ON 

x 

ON 

r-'. 


rH 




rH 

CM 

ho 

ON 

r>- 


rH 



CM 

<v 

CM 

rH 

cd 










0) 








UH 



03 










xj 







3 

o 

ON 


3 










cd 







rH 

a 

rH 


3 










CO 







X 

ed 

j 

N—/ 


& 










3 

03 







H 


3 


o 



vO 


CM 





& 



vo 


CM 



3 

o 

CO 

o 

<1- 

00 

o 

CM 

Mf 

o 

ON 

r"» 

vO 

a 

Mi- 

00 

O 

CM 


ON 


o 

X 

• 

a 

• 

• 

• 

• 

• 

• 

» 

• 

• 

o 

• 

• 

• 

• 

• 

• 


-H 

rH 

o 

x 

CO 

VO 

m 

m 

00 

m 

CO 

o 

ON 

o 

CO 

vO 

m 

m 

00 

CO 


X 

rH 



00 

CM 


CO 


r-'- 

CM 

CM 

rH 


00 

CM 


co 


CM 


3 

X 

ON 


On 

r- 


rH 




rH 

CM 


ON 

r-. 


rH 




O 

co 


3 

00 

HO 

3 

PQ 


Mf 

O 

i-- 

<j> 

o 

x 

X 

3 

cr 

w 


• 00 - 


</> 


</></></></> 


-co- 


co¬ 


co 

X 

3 


CO 

X 

3 


-co¬ 





rH 


/-N 


CO 







X 

/"N 


3 



4J 

4-1 

O 


o 


03 






X 

0 

o 


3 



o 

a 

'd 


o 


X 





o 

o 

HO 

o 


X 



3 

3 



rH 


3 





3 

3 


X 


3 



HO 

HO 

oo 

V-/ 



4-J 





HO 

HO 

00 



X 



O 

O 

m 


• • 


X 

03 




o 

O 

m 

.. 


X 



X 

u 

CN 

3 

00 


HO 

CO 


rH 


X 

X 

ON 

^ oo 


H3 


x 

0-i 

p-( 

rH 

4-1 

in 


3 

3 


3 


X 

P-. 

X 

m 


3 


0) 




cd 

ON 


03 

03 

rH 

O 





3 On 


3 

X 

X 

rH 

rH 

4-4 

P5 

rH 


Ch 44 

3 

o 


<—1 

X 

X 

x x 

/-s 


3 

x 

cd 

cd 

o 


v-/ 


X 

03 

X 

X 


3 

3 

o 

3 v—' 


>< 

X 

cd 

3 

3 


4-> 



w 

Q 

3 



3 

3 


« 


W 

3 

3 

o 

o 

CO 

3 

X 




HO 

HO 


O 

O 

CO 

X 



HO 

O' 

X 

X 

3 

3 

03 

HO 

4-J 

rH 

3 

3 


X 

X 

3 

HO 3 

HO 

X 

3 


4-1 

4-1 

o 

a 

HO 

rH 

3 

cd 

P*4 

3 

X 

X 

X 

O 

3 HO 

X 

3 

Ph 

H3 

cd 

Cd 

*H 

in 

3 

03 

3 

3 



3 

3 

3 

X 

>N 3 

3 

3 


q 

23 

25 

rH 

o 

H 

X 

a 

O 

X 

3 

4-J 

S3 

25 

X 

O H 

X 

a 

X 

ft 



rH 

rH 


>-• 

3 

♦H 

3 

4-» 

o 



X 

X 

S^ 

3 

3 


CO 

CO 

*H 

9- 

<13 


X 

4-J 

X 

3 

H 

CO 

CO 

X 

CX 3 


X 

X 

x 

CO 

CO 

X 

a 

O 

H3 

03 

3 

4-J 

4-J 


CO 

CO 

X 

a o 

HO 

3 

X 

cd 

o 

o 


03 

X 

3 

> 

S3 

o 

C/5 


o 

o 


3 X 

3 

> 

o 

0) 

x 

X 


3 

X 

O 

0 





X 

X 


3 X 

O 

Q 


>-• 

o 

O 


S3 

CH 

X 

O 





O 

o 


X O-i 

X 

c-5 



ed 


103 


All dollar figures are in billions of current dollars, except where otherwise noted. 





Table 2 (continued) 


ACDA/E-156 





fs. 


CM 







ON 


cn 


St 

rH 

m 


NO 

00 

st 

St 

m 

CO 

00 

CO 

o 


00 

r^- 

• 

• 

• 

# 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

CM 

o 

MD 

St 

rH 


O 


CO 

rH 

r>. 

rH 

St 

rH 

rs 

?H 


o 

r>. 


St 


is* 

CM 

St 

st 

o 

00 


St 


CO 

ON 

rH 

r-* 


rH 




rH 

CM 

rH 

r-- 


rH 



rH 

rH 









rH 










ON 









m 


00 


CO 

CM 

ON 

m 

ON 

00 

o 

CM 

CM 

CO 

m 

o 

CM 

O 

00 

r>. 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

CM 

rs. 

o 

St 

o 

I"-. 

rH 

r^ 

rH 

ON 

CO 

m 

st 

rH 


o 

n- 

00 



st 



CM 

sr 

CO 

ON 





CO 

ON 

o 

r- 


rH 




rH 

CM 

o 



rH 



rH 

rH 









rH 










00 


CM 







ON 

CO 

CO 


CM 

St 

CM 

ON 

CM 

ON 

m 

ON 

00 

CM 

m 

m 

VO 

ON 


• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

CM 

CM 

St 

St 

O 

|s» 

rH 

M3 

00 

1^. 

r>» 

IS. 

St 

o 

is. 

ON 

h- 


NO 


st 


r-*. 

CM 

CO 

CO 

r^ 

vO 


St 


CM 

ON 

O 



rH 




rH 

CM 

o 

I-'- 


rH 



rH 

rH 









rH 











rH 


00 








ON 


00 


rH 


st 

00 

St 

NO 

ON 

o 

m 

st 

ON 


CM 

CO 

rH 

NO 

ON 

NO 

• 


• 

* 

• 

• 

• 

• 

• 

• 

• 


• 

• 

• 

• 

• 

• 

CM 

*d 

m 

in 

m 

ON 


CM 

NO 

NO 

St 


ON 

00 

m 

ON 

fs. 

00 

r>. 

0) 

m 

m 


CO 



CM 

CO 

CO 

T3 

m 

m 


CO 


CM 

On 

hi 

o 

i". 


rH 




rH 

CM 

0) 

o 

r>. 


rH 



rH 

cd 

rH 









<U 

rH 







to 










oj 








G 










CO 








03 










d 








a 










03 








a 










& 








o 



NO 


St 





W\ 



rH 


St 


-t 

o 

CO 

st 

CM 

CO 

O 

m 

CM 

o 


o 

NO 

o 

rH 

CO 

O 

vO 

• 

d 

• 

• 

« 

• 

• 

• 

• 

• 

• 

V 

• 

• 

® 

• 

• 

• 

rH 

5 

St 

ON 

m 

ON 

00 

CM 

vO 

<t 

CM 


vO 

rH 

m 

On 

00 




St 

St 


CO 


ITS. 

CM 

CO 

CO 


St 

m 


CO 


CM 

ON 


O 

Is. 


rH 




rH 

CM 


O 

rs. 


rH 



rH 


rH 










rH 








<J> 

</> 




</></> 

<J> <J> 


</> 

</> 



























CO 










CO 








u 










d 








cd 










cd 








rH 










rH 








rH 



CO 







rH 

/*\ 


CO 



u 

4J 

o 

o 


0 ) 





Hi 

Hi 

O 

O 


03 



o 

o 

*d ✓-n O 


d 





u 

o 

*d 

O 


U 



3 

d 


rH 


d 





d 

d 


rH 


d 



*d 

*d 

00 w 



Hi 





TJ 

TJ 

00 



Hi 



O 

o 

in 

• • 


•H 

a) 




O 

o 

m 

6-5 .. 


•H 



U 

u 

On <D 

00 


*d 

00 


rH 


Vi 

Vi 

ON 

w oo 




u 

PH 

(u 

rH HI 

in 


d 

d 


cd 


CH 

PH 

rH 

m 


d 


0 ) 



«d 

ON 


cu 

03 

rH 

O 





03 On 


03 

13 

u 

rH 

rH 

MH 02 

rH 


Q« 

IH 

cd 

O 


3 

rH 

14H 

Hi rH 


a 

u 

cO 

(0 

O 

6-5 

X 

w 

03 

u 

►J 


cd 

O 

cd ■S-" 

X 

Vi 

cd 

G 

d 

U 



o 

03 



d 

d 


P5 


w 

03 

d 

O 

o 

co d 

X 




'd 

T3 


o 

o 

CO 

X 



TJ 

O’ 

•rH 

•H 

d 03 

0) 

T3 

4-1 

rH 

03 

d 


•H 

•H 

d 

*d 03 

•d 

Hi 

03 


Hi 

■u 

o a 

TJ 

rH 

d 

cd 

pH 

CO 

rH 

Hi 

Hi 

o 

03 TJ 

rH 

d 

pH 

'G 

<0 

cd 

•H S 

d 

03 

03 

d 



cd 

cd 

cd 

•H 

5n d 

03 

03 


G 

S3 

S3 

rH O 

M 

•H 

a 

o 

u 

03 

H> 

S3 

55 

rH 

O M 


a 

Vi 

CO 



rH rH 


>s 

d 

•H 

03 

4-1 

O 



rH 

rH 

>-• 

d 

03 


CO 

CO 

•rH cL 

03 


c 

4-1 

X! 

<d 

H 

CO 

CO 

*H 

a- s 


Vi 

jc 

V» 

CO 

CO 

rO a 

O 

TJ 

03 

«d 

4-1 

■U 


CO 

CO 

X 

*d 

03 

Hi 

(0 

o 

o 

v—' Q) 

•H 

d 

> 

55 

O 

CO 


o 

o 

w 

03 *H 

d 

> 

o 

0) 

u 

u 

d 


o 

0 





u 

u 


d d 

o 

Q 


>4 

o 

o 


PH 

PQ 

O 





o 

O 


S3 PV, 

PQ 

o 



104 




ACDA/E-156 


This modest amount of added civilian spending can be accommodated by 
undertaking small scale urban, transport, or anti-pollution programs. 

If these are carried out in the private sector, with government financ¬ 
ing, we simply have an increase in government expenditures, with no 
accompanying increase in government wage payments. This is the way the 
compensatory alternative is programmed into the model. 

Case 2. Budget C : The major escalation of the war in Vietnam began in 
1965; thus a return to the 1965 fiscal year defense budget, inflated for 
1972 price levels, and pay increases that have occurred since 1965 pro¬ 
vide a case of moderate scale disarmament. A target military budget of 
the last prewar size for 1972.4, together with an assumption of a 
cease fire from the end of fiscal year 1971 provide the main charac¬ 
teristics of this case. 

The defense spending target of $67.9 billion for 1972.4 is just $2.5 
billion under the spending figure for the previous Budget D case. With 
this comparatively small additional cutback in defense spending, we have 
not altered the pattern used in the previous case for the size of the 
armed forces. It is programmed to fall gradually to 2.7 million men by 
1972.4. 

The main results for Budget C are only slightly different from those 
of Budget D because the only changes in exogenous inputs are those for 
additional defense spending cuts that grow to a maximum of $2.5 billion. 
Table 3 gives the leading calculations for Case 2. 

The compensated version of this case programs an increment to non¬ 
military Federal spending that grows over time and reaches a figure of 
$6.0 billion by 1972.4. This raises the estimate of constant dollar 
GIP by more than $7.0 billion and shaves more than a half point from the 
projected unemployment rate in 1972.4. 

Case 3 Budget B: This de-escalation is deeper than that implied by 
the inflated budget for FY 1965 (Budget C). This program rests on 
deferral cf SAFEGUARD, and MINUTEMAN III, cessation ot further expendi¬ 
tures on theater nuclear forces, modernization of forces, and salvage 
of higher-value Vietnam surpluses. In this case we program the demobil 
ization of and additional 200,000 men, and cut military expenditures 
$11 billion (current prices) below the Budget D Solution. To compen 
sate for this substantial amount of disarmament, we introduce an easier 
monetary policy, civilian expenditure offsets that reach $6.5 billion, 
and a five percent income tax cut at the end of F* 19/i. 

The easier monetary policy is represented by faster cuts in the dis¬ 
count rate and more open market operations. These stimulative policies 
are manifested in the solution by lower interest rates and higher levels 


105 





Table 3 

Budget C Solution - Defense Expenditures 
Equal to $67.9 billion (1972 dollars) by 1972.4 

and Quarter 1970.3 1970.4 1971.1 1971.2 1971.3 


ACDA/E-156 


cn 


ON 

<n 

o 


cn 

o 


vO 


<D 

4J 

«d 

CO 

c 

<D 

O 

CJ 

a 


00 

ON 


o 

VO VO VO rH 

• • • • 

on oo oo 

CO 

P-* rH 


vO 

CM 00 m CM 


O VO 00 

<J- CO 

r" rH 


VO CO 
in M (N CO 


cm m vo co 
CM CO 

I s * tH 


W 

u 

CT3 










o 


m 

f"- 


vO 

vO 

m 

m 

vO 

rH 

o 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

CM 

m 

H 

ON 

O 

o 


00 

00 

n*. 


CM 

CO 

CM 


m 


cn 


CM 



rH 

CM 

o 

n- 


rH 





rH 









rH 




O 

rH 

m 

rH 

m 

rH 

vO 

O 

<1- 

o 

rH 

in 

rH 

rH 

• 

. 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

CM 


r-*- 

00 

cn 

m 

00 


<r 

CM 


p^ 

00 

m 

m 


cn 


p>* 

CNJ 

CM 

CM 

cn 

m 


cn 


CN 



rH 




rH 

CM 

o 

r*. 


»H 






<* 

p^ 



CM 

00 

rH 

CM 

00 

m 

CM 


• 

• 

• 

• 

• 

• 

• 

• 

. 


m 

cn 

rH 

O 


vO 

00 


CM 

CM 

CM 

rH 



cn 


CM 


rH 

CM 

o 



r—1 






rH 












vO 


cn 


cn 


<r 

VO 

m 

CM 

CM 

cn 

cn 

• 

• 

• 

• 

• 

• 

• 

• 

• 


CM 

rH 


CM 

m 

vO 

00 


CM 

CM 

CM 

00 

CM 


cn 


CM 


rH 

CM 

03 On 

P>. 


rH 




<D 

44 

CTJ 

CO 

CJ 

<D 




VO 


CM 



e- 



vO 


CM 



00 

O 

CM 


o 

On P s > vO 

s 


00 

O 

CM 


ON 

• 

• 

• 

• 

• 

• 

... 

o 

. 

• 

• 

• 

• 

• 

cn 

vO 

m 

m 

00 

m 

cn o on 

CJ 

cn 

vO 

m 

m 

00 

cn 

00 

CM 


cn 



CM CM rH 


oo 

CM 


cn 


CM 

ON 

P- 


rH 



rH CM 


ON 

P^ 


rH 



</> 

</> 




</> 

</></></> 


</> 

</> 




-co- 


CO 

u 

cd 


44 44 

o o 

3 P 

03 03 

o o 
u u 
CH cu 


o 

T3 ^ 

00 

uo 

ON <D 


o 

o 


CO 

(1) 

»4 

p 

4-1 


id id 
d d 
o o 


44 

o 


a 


oo 

m 

ON 


03 

CJ 


0) 

CO 

CJ 


4-1 4-4 

cd «d 
23 23 


CO 

CJ 

o 


4-4 

CJ 

% 

So 

o 




<D <D 

Cu 14-4 


<D 

03 

a 


X a) 
W Q 


0) 


4-4 rH 

cJ cd 
CJ 
o 


cd 

rH U 

cd o 

d) 

T) 03 
CD CJ 


44 4J 
O O 
d d 
03 03 
O O 
H U 
P-. (X, 


cd cd 
d d 
o o 


o 

03 

00 

in 

ON Q) 
rH 4-4 

4-1 OJ 

O 


O 

o 


00 

m 

ON 


u 

cd 

d) 


CO CO 
CO CO 

o o 

V4 U 

o o 


•H Q. 
-o 0 
v-' d) 

a 


<D 

O 


I 

a 


03 

•h d 

j-i o 

CQ 


4-J 

CD cd 
> 23 
O 
O 


PM Cd rH 

cd 

CD 4-4 
4-4 O 

cd H 

44 


d) 

-d 

44 


44 44 

cd cd 

Z 23 


CO 

d 

o 

•H 


■U 

d 

§ 

o 


O CO 


CO CO 
CO CO 

o o 

M V4 

o o 


*H D-. 
-Q 0 

'W' Q) 


X 

CD 03 
03 rH 
d CD 
M *H 
>4 
<D 

O 03 

•h d 
P4 O 
P4 CQ 


CO 

<D 

d 

44 

•H 

03 

d 

CD rH 
a cd 
X V4 


w 


44 

d 

CD 

a 

c 

V4 

d) 

> 

o 

o 


CD 

03 

d) 

Pm 


V4 

d) 

jd 


03 

CD 

4-4 

o 

d 


CD 

CO 


2 


CD 

x: 

44 

o 


44 

04 

<D 

o 

X 

d) 


CO 

cd 


o 

03 


44 

d 

CD 

M 

U 

P 

O 


44 

o 


CO 

d 

o 

•H 


*H 

rO 


d) 

u 

cd 


co 

CD 

V4 

p 

00 


44 


p4 

cd 


o 

03 


cd 


CD 

U 

CD 

-d 

£ 













106 









ACDA/E-156 





vO 


rH 







00 


CO 



<r> 

NO 

vO 

m 

00 

ON 

-<r 

m 


ON 

ON 

o 


00 

-d - 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

CN 

m 

<r> 


rH 

r^- 

n* 

r^ 

CO 

oc 

vO 

o 


rH 

r"* 

CO 

r^. 

ON 



-d- 


vO 

CM 


CO 

o 

00 


v^“ 


CO 

ON 

o 



r—1 




rH 

CN 

rH 

r>. 


rH 



rH 

t—1 









rH 










O 


VO 







n. 


00 


CO 

m 

rH 

00 

ON 

00 

m 

rH 

rH 


CN 

CO 

CN 

O 

00 

CN 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

CN 

CN 

00 

<1- 

o 


00 

r^ 

rH 

vO 

CN 


<3" 

rH 


CN 

n- 

00 

vO 


'd- 


vO 

CN 

<r 

CO 

ON 



•vf 


CO 

ON 

o 

r>- 


tH 




rH 

CN 

O 



rH 



rH 

rH 









rH 














CN 








CN 


CO 



CN 


vO 

00 

rH 

CN 

On 

m 

00 

00 

rH 


v* 

ON 


CO 

ON 

o 


• 


• 

• 

• 

• 

• 

• 

• 

• 

• 


• 

• 

• 

• 

• 

• 


CN 


00 

iH 

m 

o 


ON 

vO 

00 

m 


vO 

VO 


o 


rH 


n* 


vO 

vO 




vO 

CN 

CO 

co 



VO 


•<r 


CO 


ON 


o 

n- 


<H 




rH 

CN 


o 



rH 




rH 


rH 










rH 

























XJ 



















G 



















3 





vO 


00 








rH 


00 


a 

rH 

XJ 

m 

O 

m 

m 

ON 

in 

m 

co 

CO 


CN 


CN 

vO 

On 

r^. 

•H 

• 

G 

• 

• 

• 

• 

• 

• 

• 

• 

• 

'O 

• 

• 

• 

• 

• 

• 


CN 

4-1 

CN 


m 

ON 

r^ 

o 

vO 

vO 

CO 

G 

00 

r^. 

m 

ON 

r>- 

ON 

c 

r» 

G 

m 

m 


CO 


n* 

CN 

CO 

CO 

4-1 

m 

m 


CO 


CN 

o 

ON 

CD 

o 



rH 




rH 

CN 

CTJ 

o 

r^- 


rH 



o 

rH 

a 

rH 









CO 

rH 








G 










C 









a 










G 







CO 


6 










O- 









o 










6 







G 


o 










O 







*H 


g 



m 







CJ 



CO 


'•d- 


rO 


d 


CO 

CO 

CN 

o 

in 

rH 

ON 

m 


00 

m 

rH 

VO 

o 

co 

G 

• 


• 

• 

• 

• 

• 

• 

• 

• 

• 


• 

• 

9 

• 

• 

• 

H 

rH 


CN 

00 

m 

ON 

00 

rH 

VO 

CO 

rH 


m 

o 

m 

ON 

00 

00 


r>. 





CO 



CN 

CO 

CO 


>d- 

m 


CO 


CN 


ON 


O 

r>- 


rH 




rH 

CN 


o 

i-"- 


rH 




rH 


rH 










rH 









•co- 

CO- 




■co- 

-CO- 

-CO- 

-CO- 


-co- 

CO- 









/*\ 



















CO 










CO 









U 










M 









CTJ 










G 









rH 










rH 









rH 


O 

CO 







rH 




CO 



4J 

4-1 

o 


o 

G 





4-1 

4-1 

o 


O 


G 



O 

O 

x> 

/-“N 

rH 






o 

O 

XJ 


o 


U 



3 

3 


** 


3 





G 

G 


5-5 

rH 


G 



XJ 

xj 

00 



4-1 





XJ 

X) 

00 

v-/ 



4-1 



O 

o 

m 


• • 

•H 

d) 




o 

O 

in 


• • 


•H 



U 

M 

ON 

a; 

00 

XJ 

co 


rH 


u 

H 

ON 

G 

00 


XJ 


U 

CH 

cu 

rH 

4-1 

m 

G 

G 


G 


pL, 

0-4 

rH 

4-1 

in 


G 


G 




G 

ON 

G 

0) 

rH 

a 





G 

ON 


G 

rH 

4-1 

rH 

rH 

4-4 

oc 

rH ✓—v 

G. 4-1 

G 

o 


*3 

rH 

44 

oi 

rH 


a 

G 

u 

CTJ 

CTJ 

o 


5^5 

X 

0) 

J-4 

hJ 


G 

o 


v-^ 

5^5 

X 


CTJ 

c 

c 


4-J 

v-/ 

W 

Q 

G 



c 

G 


4-1 

X 

V-/ 

w 

G 

3 

o 

o 

CO 

G 

X 



XJ 

xj 


o 

O 

CO 

c 



XJ 

O' 

♦H 

*H 

G 


a) x) 

4-» 

rH 

G 

G 


*H 

•H 

G 

G 

G 

XJ 

4-» 

G 

4-1 

4-1 

o 


X) rH 

G 

G 

O-i 

G 

rH 

4-1 

4-4 

o 

e 

XJ 

rH 

G 

JH 

XJ 

CTJ 

CTJ 

•H 


G G 


G 



G 

G 

G 

*H 

>> 

G 

G 

G 


g 

5Z 

J3 

rH 

O 

M -H 

s 

O 


G 

4-1 

53 


rH 

o 

w 

•H 

g 

H 

CTJ 



-H 

rH 

>< 

G 

•H 

G 

4-1 

O 



rH 

rH 


>-• 

G 

G 


CO 

CO 

*H 

Gr 

G 


4-1 

-G 

G 

H 

co 

w 

*H 

a. 

G 



rC 

u 

CO 

CO 

rO 

S 

a xj 

G 

G 

4-» 

4-1 


co 

CO 

rQ 

& 

a 

XJ 

G 

4-4 

CTJ 

o 

o 


G 

*H G 

> 

2 

O 

CO 


O 

o 


G 

•H 

G 

> 

O 

G 

*4 

u 


G 

J-i O 

o 





H 

M 


c 

V4 

O 

O 


>* 

o 

o 


G3 

CH CO 

O 





o 

O 


D 

cu 

CO 

c3 



107 




ACDA/E-156 


of capital formation. The calculations are also done without fiscal 
or monetary compensation. 

From the viewpoint of an advocate of disarmament, the compensated 
version of Budget B represents a low defense budget, large-scale demobil¬ 
ization, and a balanced civilian program. As in the previous case, the 
civilian offset expenditures are assumed to occur in the private sector, 
but spent by government. The civilian offsets are balanced between the 
fiscal activities of spending and tax remission and also between fiscal 
and monetary measures. The latter stimulate the economy by stimulating 
private fixed capital formation. The projected time paths of the same 
four variables presented for the other solutions together with government 
expenditure assumptions are given in Table 4. Unemployment is not at a 
long run equilibrium level (under 4 percent) by the end of 1972, but it 
comes down to 4.5 percent under the stimulus of compensatory policy and 
is improving as the calculation ends. 

•n 

Case 4. Budget E : This is an altogether different type of assumption 
and solution pattern. The war is assumed to be terminated but military 
expenditures are increased rather than reduced. ABM and new warfare 
systems are included in the budget. The inputs allow for an expansion 
of outlay for R & D, intelligence, and communications. Although the 
air, sea, and ground war in Vietnam is concluded in this program, the 
size of the military establishment is gradually restored to its recent 
peak value of 3.5 million men. 

The additional expenditures more than cover the reductions associated 
with Vietnam peace. As a result, the total military budget is fixed at 
$93.0 billion (current prices) by the end of 1972. This is about $13 
billion above the highest defense outlays during the War. It is also 
assumed that civilian programs are not cut back from the levels used in 
the control solution. In total, this case provides for a large, growing 
public sector. 

It is unlikely that an extreme policy like this would be uncompen¬ 
sated, but the appropriate compensatory policies in this case are tighter 
monetary policies and lower civilian spending by the Federal government. 
The discount rate is kept high—at 5% percent from the end of 1970—and 
nonborrowed reserves are kept below the values attained in the control 
solution. Income tax rates are increased by 5 percent after July 1, 

1971. 

This solution has higher interest rates, higher prices, and lower 
unemployment. It also generates more real GNP. It is not a situation 
of intense inflation, however, because it comes during a period that has 
a substantial }, cooling-of f” phase at the beginning. It does, however. 


108 





ACDA/E-156 





m 


O 







<r 


00 






00 

X 

r>. 

m 

rH 

o 


CO 

o 


o 

m 

m 

o 

On 

oo 

o 

o 

CM 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

vO 

00 

<r 

oo 

oo 

rH 

m 

rH 

00 

CM 

CM 


00 

00 

VO 

VO 

On 

in 

o 

on 



ro 



CM 

CO 

CM 

<r 

m 


CO 


CM 

rH 

CO 


CO 

o 



rH 




rH 

CM 

o 



r—1 



rH 




x 









X 











• 

X 

G 

x 

o 

c 


a) 

co 


X 


CM 


o 

rH 

«n 

rH 

•n 

rH 

vO 

O 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

rH 

>d- 

CM 

<3- 

r>H 

00 

CO 

m 

00 


r-. 

co 

m 


co 



Csl 

CM 

CM 

on 

O 



rH 




rH 

CM 


>CJ- 

O 

iH 

rH 

m 

rH 

rH 

-d- 

r^. 

o 

m 


X 

a 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

0) 

><r 

CM 



00 

m 

o 

o 

m 

ON 

JQ 

CO 

o 

rH 

m 


co 

rH 


CM 

CM 

rH 



CM 

4-> 

o 


G 

<r 


co 

a) 

x 

G 


x 

G 


• 




vD 


<r 







vO 






o 


CM 

X 

tH 

m 

00 

m 

CM 

o 


CM 

00 

rH 

CM 

00 

m 

CM 


m 

r^. 

m 

00 


• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

on 

rH 

iH 

o 


vD 

00 


-<r 

m 

CO 

rH 

O 


vO 

oo 

<r 

vO 

o 

m 

oo 

rH 


»H 



CO 



CM 

CM 

CM 

rH 



CO 


CM 

rH 

<1- 


CM 


ON 

O 

n*. 


tH 




rH 

CM 

o 

I"". 


rH 



rH 





tn 

JC> 


G 

X 

G 

-C 

S 

X 

CM 

a> 

o 

X 

a) 



a) 

CO 
























CO 


& 

X 

G 





vO 


CO 








VO 


CO 





o 


x 

G 


w 

rH 

-d- 


VO 

m 

CM 

CM 

CO 

m 

co 




vO 

m 

CM 

CM 

CO 


CO 


CO 

m 

CM 

tH 



X 

• 


• 

• 

• 

• 

• 

• 

• 

• 

• 


• 

• 

• 

• 

• 


• 

• 

• 

• 

• 

rH 


G 

o 

o 

X 

<r 

CM 

in 

vO 

00 

<r 

<3- 

CM 

rH 


>d- 

CM 

m 

vO 

00 


<r 

vO 

00 

in 

oo 

O 


0) 

X 


a) 

00 

CM 


CO 



CM 

CM 

CM 

X 

00 

CM 


CO 



CM 

rH 

CO 


CM 

X 


a 


on 

X 

ON 

n* 


rH 




rH 

CM 

g 

On 



rH 




rH 






G 

CM 

rH 

G 










4-J 












4-J 

<r 

44 



co 










cd 












G 


g 

On 


G 










co 












QJ 

0) 

Q 

rH 


<D 










G 












X 

rH 


v-' 


a 










G 












X 

•8 

i 

a 


a 

o 



vO 


CM 





& 



vO 


CM 





m 


G 

O 

H 

G 

o 

CO 

o 

'■d* 

00 

o 

CM 


o 

On 

rv 

vO 

O 


00 

o 

<N 



ON 

m 



vO 



o 

X . 

• 

G 

• 

• 

• 

• 

• 

• 

• 

• 

• 

CJ 

• 

• 

• 

• 

• 


• 

• 

• 

• 

• 

44 


X 

rH 

o 

tG 

CO 

vO 

m 

m 

oo 

m 

CO 

o 

ON 


CO 

VO 

m 

m 

00 


CO 

m 

ON 

m 

n* 

O 


X 

rH 

r-* 


00 

CM 


co 



CM 

CM 

rH 


00 

CM 


CO 



CM 

rH 

CO 


CM 



3 

X 

ON 


ON 

n- 


rH 




t—1 

CM 


ON 



tH 




rH 




CO 


tH 

rO 

rH 

















CO 






G 


O 




•CO- 

</> 




</> 

</></></> 


CO- 

co- 




4-J 

CO- CO- CO- 


•co- 

O 


CD 

m 


















a 






X 


PQ 

x 

G 

00 

X 

3 

PQ 


on 

m 

</> 

o 

X 


G 

G 

a 4 

w 


x 

g 

4-J 

X 

G 

G 

O' 

X 

G 

G 

X 

G 

0) 

tH 



















G 


CO 




X 


















O 


X 




X 


















G 


G 




-O 


















04 


G 







/—s 
















CO 

0 




G 



CO 











CO 




X 

G 





X 



u 











X 




G 

X 

G 







G 











G 




G 

G 

CM 




G 



rH 


/T^S. 









X 


/-— s 



X 


CO 



X 



X 


o 


w 







X 


o 


W 

X 

X 

G 



G 

X 

4-J 

o 


o 


G 





X 

X 

o 


o 


G 

X 

G 

X 




a 

o 

X 


X 


X 





a 

o 

X 


X 


X 

G 

X 

G 



CO 

G 

G 


S'? 



G 





G 

G 





G 

G 

G 

H 



G 

X 

X 

00 




X 





X 

X 

00 




X 

& 

O 



CO 

X 

o 

o 

m 


• • 


X 

G 




o 

O 

in 


• • 


X 

X 

:z 

G 


G 

G 

X 

x 

ON 

G 

00 


X 

CO 


X 


X 

X 

ON 

G 

00 


X 

w 


0 


> 

00 

CM 

cu 

X 

X 

m 


G 

G 


G 


PM 

PM 

X 

X 

m 


c 


<-3 

O 


X 

X 




G 

ON 


G 

G 

X 

o 





G 

ON 


G 

X 


a 

G 

G 

X 

rH 

X 

X 

Pd 

X 

/ - N 

PL X 

G 

o 


X 

X 

X 


X 

/~-N 


G 

X 

C 

X 

CO 


cd 

G 

o 


v-/ 

6^ 

X 

G 

X 

►J 


G 

G 

o 




X 

G 

X 

G 

G 

X 

G 

G 


X 


V—/ 

fx3 

a 

G 



C 

G 


X 


'w' 

w 

G 

H 


cd 

cd 

G 

O 

o 

CO 

C 

X 




X 

X 


O 

O 

to 

G 




X 


G 



X 

X 

X 

G 

CD 

CD 

X 

X 

X 

G 

G 


X 

X 

G 

G 

G 

X 

X 

G 

X 

X 

X 

X 

X 

4-1 

X 

o 

0 

X 

X 

G 

G 

Pm 

G 

X 

X 

X 

o 

0 

X 

X 

G 

Pm 

G 

G 

G 

G 

o 

cd 

id 

X 

>» 

G 

G 

G 

G 



G 

G 

G 

X 

Sn 

G 

G 

G 


G 

X 

G 


X 

5s 

53 

X 

O 

X 

•H 

0 

O 

X 

G 

X 

JZ 

JZ 

X 

O 

X 

X 

0 

X 

O 

o 

O 

o 




rH 

X 


>* 

G 

X 

G 

X 

O 



X 

X 


>* 

C 

G 

CO 

PM 

O 

X 

X 

CO 

CO 

X 

Pu 

CD 


X 

X 

-G 

G 

H 

CO 

CO 

X 

cu 

G 


X 

-G 

X 

X 

CO 

X 

H 

CO 

CO 

,o 

0 

O 

X 

G 

G 

X 

X 


co 

co 

40 

0 

O 

X 

G 

X 

G 

O 

X 

o 

< 

o 

o 


Q) 

X 

c 

> 

2 

o 

CD 


o 

o 

S-4 

G 

•H 

G 

> 

O 

PM 

O 

Q 

40 

G 

x 

x 


G 

X 

Q 

Q 





X 

X 


G 

X 

O 

Q 





c 


o 

o 


GJ 

P4 

PQ 

O 





o 

O 


to 

CM 

PQ 

O 





to 



109 




ACDA/E-156 


i 


nO 


st 

ro 

rH 

st 

CM 

is 

m 

rH 

CM 

IS 

m 

rH 

st 

m 

NO 

NO 

ON 

NO 

o 

rH 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

CM 

ON 

st 

m 

rH 

rs 

ON 

rs 

ro 

ON 

rH 

00 

-<r 

rH 

rs 

ro 

st 

rH 

in 

m 

rs 

rs 

NO 


st 


m 

04 


CM 

o 

rs 


St 


ro 

CM 

st 


ro 

ON 

O 

is 


rH 




rH 

CM 

rH 

IS 


rH 



rH 




rH 

rH 









rH 













rs 


«<r 







rH 


CM 






cn 

ON 

00 

St 

NO 

oo 

m 

ON 

ON 

ro 

ro 

ro 

NO 

00 

rs 

CM 

o 

m 

o 

rH 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 






CM 

00 

ON 

m 

o 

rs 

rH 

NO 

o 

ON 

oo 

CM 

St 

o 

rs 

CM 

CM 

rH 

m 

St 

rs 

nO 

m 


st 


NO 

CN! 

st 

CM 

00 

rs. 


st 


ro 

CM 

st 


ro 

ON 

O 

rs 


rH 




rH 

CM 

o 

rs 


rH 



rH 




rH 

rH 









rH 













rs 


O 







00 


o 






CM 

ON 

NO 

is 

o 

ON 

in 

NO 

m 

m 

NO 

m 

ON 

CM 

00 

ON 

CM 

m 

o 

rH 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

<N 

NO 

st 

m 

o 

rs 

ro 

NO 

00 

00 

ro 

m 

St 

O 

rs 

O 

ON 

rH 

m 

ro 

is 

m 

m 


st 


NO 

CM 

ro 

CM 

rs 

NO 


st 


ro 

rH 

st 


ro 

Ov 

o 

is 


rH 




rH 

CM 

o 

rs. 


rH 



rH 





/-N 











d 





»H 


rs 




04 

rH 


rH 

rs 

O 

st 

ON 

o 

st 

CM 

3 

• 

d 

• 

• 

• 

• 

• 

• 

• 

• 

g 

CM 

0) 

St 

00 

NO 

ON 

rs 

NO 

NO 

vO 

*H 

rs 

4-1 

St 

st 


ro 


NO 

CM 

ro 

4-J 

ON 

OJ 

O 

rs 


rH 




rH 

c 

rH 

CO 

rH 








o 


G 









o 


0) 









V-/ 


a 











B 









st 


o 











o 



St 


St 




04 

st 

g 

ON 

00 

NO 

rH 

O 

m 

CM 

00 

rH 

• 

:g 

• 

• 

• 

• 

• 

• 

• 

• 

JO 

rH 


NO 

st 

m 

ON 

oo 

oo 

NO 

ro 

CO 

rs 


ro 

St 


ro 


NO 

CM 

ro 

H 

ON 


O 

rs 


rH 




rH 


rH 


rH 











<J> 

</> 




</> 

</> 



st (Tv 


NO 


00 

ON 

CO 

m 

oo 


NO 

CM 

o 

o 

rH 

• 


• 

• 

• 

• 

• 


• 

• 

• 

• 

• 

00 

03 

rs 

IS 

n 

ON 

rs 


ON 

vO 

CM 

in 

CNj 

CM 

00 

m 

in 


ro 



CM 

rH 

St 


CO 

CM 

4-J 

o 

rs 


rH 




rH 





Cd 

rH 












CO 













c 













00 













a 













B 













o 



ro 


ON 







ro 

o 

St 

ON 

rH 

CM 

On 


ro 

CO 

ON 

o 

rH 

• 


• 

• 

• 

• 

• 


• 

• 

• 

• 

• 

00 


rs 

«H 

m 

ON 

rs 


oo 

00 

00 

in 

rH 

CM 


st 

m 


CO 



CM 

rH 

ro 


CO 

CM 


© 

rs 


rH 




rH 






fH 





CO 






</> 


</> 

</> 




4-J 

<j> </> 

</> 


<J> 


a 

•H 

0) CO 

O 4-J 


0) G 

K 00. 





/S 











/S. 





CO 

S' 







CO 











CO 




*d 

0) 

>N 







0-4 











u 




G 

u 

cd 







cd 











cd 




cd 

G 

a 







rH 











rH 


/S 



4-J 


C0 






r-I 


O 


CO 







rH 


o 


CO 

•H 

X 

00 




4-J 

u 

O 


o 


00 





4-> 

4-J 

o 


O 


00 

d 

cd 

X 




O 

o 

d 

/s 

rH 


H 





o 

u 

d 

/S 

rH 


H 

G 

4J 

cd 




3 






3 





3 

G 


6^ 



G 

00 

G 

H 




d 

d 

00 

v-x 



4-1 





d 

d 

00 

w 



4-J 

a 

O 


/TN 

CO 


O 

O 

m 


• • 


•H 

0) 




O 

o 

m 


• • 


•H 

X 

23 

00 


00 


U 

U 

ON 

d) 

00 


d 

CO 


iH 


M 


ON 

0) 

00 


*d 

w 


a 

N-/ 

> 

u 

a 

a 

rH 

4-1 

in 


G 

G 


cd 


a 

a 

rH 

4-J 

in 


G 

oS 

o 


0-1 

<d 




cd 

ON 


0) 

00 

rH 

o 





cd 

On 


00 

rH 


o 

0) 

00 

u 

iH 

*H 

iw 

0(3 

rH 

/*S 

a 

IH 

cd 

o 


rH 

rH 

U-l 

a 

rH 


a 

cd 

X 

G 

4-J 

CO 

u 

03 

cd 

O 


s-/ 


X 

a 

00 

U 

a 


cd 

cd 

O 


N-/ 


X 

0-1 

cd 

M 

cd 

00 

00 

G 

G 


4-J 

X 

v —'• 

Q 

00 



G 

G 


4-J 



w 

00 

H 


a 

a 

3 

O 

O 

CO 

G 




d 

d 


O 

o 

CO 

G 

X 



d 


0) 

O’ 

*H 

•H 

C 

Si 

<10 

d 

4-J 

rH 

00 

G 


*H 

•H 

G 

Si 

00 

tj 

4-1 

0) 

fH 

4-J 

4-J 

d 


4-1 

4-J 

o 

S 

d 

rH 

G 

id 

a 

cd 

rH 

4-J 

4-J 

O 

B 

d 

rH 

G 

a 

cd 

cd 

G 

00 

d 

cd 

Cd 

d 

Jo 

G 

00 

<jj 

G 



cd 

cd 

cd 

*H 

>N 

G 

00 

00 


G 

M 

G 


g 

2 

23 

rH 

O 

M 

*H 

0 

o 

u 

00 

4-J 

53 

z 

rH 

O 

M 


B 

14 

O 

O 

O 

o 

CCS 



rH 

rH 


>-< 

G 

•H 

00 

4-J 

o 



rH 

rH 



G 

0) 

CO 

a 

o 

u 


CO 

CO 

•H 

a 

00 


H 

4-J 

x: 

cd 

H 

CO 

CO 

•H 

P« 

00 


H 

-G 

>-l 

u 

CO 

u 

M 

CO 

CO 

X) 

S 

O 

d 

00 

id 

4-J 

4-J 


CO 

CO 

-Q 

B 

O 

T0 

0) 

4J 

00 

o 

•H 

o 

00 

o 

o 

s-/ 

00 

*»H 

G 

> 

!z 

o 

CO 


o 

o 

N-/ 

0) 

•H 

G 

> 

o 

a 

CJ 

Q 

n 

00 

u 



G 

U 

O 

0 





u 

u 


G 


o 

0 





»■ ■ 
rj 


o 

O 


G0 

a 

PQ 

o 





o 

O 


EG 

a 

a 

o 







110 







ACDA/E-156 


co 


p^. 


ON 


vO 

o 

o 

co 


rH 

rH 

o 

Ov 

m 

CO 

O 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

Mfr 

CO 


CO 

00 

vO 

in 

rH 

CO 

o 

Mf 

o 

rH 

m 


CO 

rH 



CM 

CO 

rH 

CO 

CM 

Mf 

o 

rH 


Mf rH 

<f VO H 

• • • • 

os oo oo 

<r m 

r^ i—i 


VO 

oo 

CO 

o 

m 

00 

♦ 

• 

• 

• 

• 

m 

vO 

rH 

m 

Os 

CM 

CM 

rH 

Mf 


CM 


CM 




o\ 


<r 

CO 

o 



rH 


r^ 







rH 



O 

rH 

m 

rH 

m 

rH 

vO 

O 

Mf 

o 

rH 

m 

rH 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

CM 


r^ 

oo 

co 

m 

00 

n* 

Mi¬ 

CM 

v* 

n- 

00 

m 


co 



CNJ 

CM 

CM 

en 

m 


CO 


r*v 


rH 




rH 

CM 

o 

n- 


rH 



o 

rH Mf in Mf 


m o o m ov 

CJ CM <f CM 


CO 

M* 



• 






vO 


Mf 










vO 


Mf 





o 



CM 

rH 


rH 


CM 

00 

m 

CM 


o 


CM 

00 


rH 


CM 

00 

m 

CM 



m 


m 

00 


co 

• 


« 


• 

• 

• 

• 


• 

• 

• 

• 


• 


• 

• 

• 

• 







0) Os 

H 


*H 


O 

Ml- 

vO 

00 


sd- 

<1- 

m 

co 


rH 


O 

Mf 

vO 

00 


Mf 

vO 

O 

m 

00 


1-4 rH 



»— f 


Mf 


CO 



r->- 

CM 

CM 

CM 


rH 


Mf 


CO 



CM 

rH 

Mf 

CM 



ov 


o 




rH 





rH 

CM 


o 




rH 









rH 


rH 












rH 













*H ,0 
T3 




























3 -^v 
3 05 

a, u 
x 3 






vO 


CO 










VO 


CO 





o 



W rH 

<d- 


vO 


m 

CM 

CM 

CO 


m 

CO 


Mf 


vO 


m 

CM 

CM 

CO 


CO 

Mf 

co 

m 

CM 


rH 

• 


• 


• 

• 

• 

• 


• 

• 

• 

• 


• 


• 

• 

• 

• 


• 

• 

• 

• 

• 


0 ) o 

o 

03 

Mf 


CM 

m 

vO 

oo 


Mf 

Ml- 

CM 

rH 


<r 


CM 

m 

vO 

00 


Mf 

vO 

00 

m 

00 


05 "d 

n- 

05 

00 


CM 


CO 



r«- 

CM 

CM 

CM 

03 

50 


CM 


CO 



CM 

rH 

CO 

CM 


3 

os 

W 

os 


n- 


rH 





rH 

CM 

3 

Os 




rH 




rH 



m 

3 CM 

l—l 

cd 












4J 














«h r-»- 


05 












3 













3 

0) Os 


a 












O) 













rH 

Q rH 


<v 












3 













’S 

'-z 

1 


t 












3 

& 













H 

3 


o 




vO 


CM 






g 




vO 


CM 





m 



3 o 

CO 

o 

Mf 


00 

o 

CM 

Mf 


o 

Os 

r>- 

VO 

O 

Ml" 


00 

o 

CM 

Mf 


Os 

m 

r-'. 


vO 


O *H 

• 

a 

• 


• 

• 

• 

• 


• 

• 

• 

• 

CJ 

• 


• 

• 

• 

• 


• 

• 

• 

• 

• 


*H rH 

o 

3> 

CO 


vO 

m 

m 

00 


m 

CO 

O 

Os 


CO 


vO 

m 

in 

00 


CO 

m 

Os 

m 



U rH 

r>. 


00 


CM 


CO 




CM 

CM 

rH 


oo 


CM 


CO 



CM 

rH 

CO 


CM 


3 iH 

os 


OS 


O- 


rH 





rH 

CM 


Ov 




rH 




rH 





rH JCi 

rH 




















3 







o 



■cry 


</> 





<ry 

<jy 

<J> 

<jy 


</> 


<o- 




4-J 

<sy <sy <sy 


-co- 


CO O 





















Cu 







• 





















•H 







W co 





















3 


3 





Os 





















a 


4-» 





4J </> 





















3 


3 





3 





















PA 


3 





OO o 





>r\ 












Z~\ 





3 

g 





-d 4-> 





05 












W 




03 

3 

Po 





3 





U 












U 




3 

Hi 

3 





eq rH 





cd 












3 




3 

3 

PH 





cd 





rH 












rH 


-s 



4J 






3 





rH 


o 


05 








tH 


o 


3 

•H 

X 





a 4 



4-J 

4-» 

o 


o 


0) 






4-J 

4-1 

o 


o 


3 

03 

3 

X 




w 



o 

a 

03 

/*\ 

rH 


Hi 






a 

o 

03 


rH 


Hi 

a 

4-J 

3 







3 

3 





3 






3 

3 





3 

3 

3 

H 







31 

TJ 

00 

'w' 



4J 






03 

03 

00 

s-^ 



4-J 

PH 

O 


Z—S 

3 





o 

O 

m 


• • 


*H 

<D 





o 

O 

m 


• • 


•H 

X 

53 

3 


3 





Hj 

M 

Oy 

3 

00 


Tl 

05 


rH 



Hi 

P4 

os 

3 

00 


03 

w 


g 

vz 

> 



u 


PH 

PH 

rH 

4-J 

m 


3 

3 


3 



PH 

PH 

rH 

4-J 

m 


3 


od 

O 


Hi 



3 




cd 

os 


3 

3 

rH 

a 






3 

os 


3 

rH 


o 

3 

3 



4-J 


rH 

rH 

4-1 

$ 

rH 

z-\ 

p. 

4-4 

3 

o 



rH 

rH 

4-4 

erf 

rH 

z—n 

P 4 

3 

X 

3 

4-J 

3 



1-4 


cd 

cd 

O 


^-z 



0) 

U 

►J 



3 

3 

O 




X 

Hi 

3 

W 

3 

3 



cd 


3 

3 


4-J 


N-Z 

w 

Q 

3 




3 

3 


4-J 

X 

VwZ 

W 

3 

H 


03 

03 



3 


o 

O 

03 

3 

X 




tj 

o3 



O 

O 

3 

3 



03 


3 





O' 


•H 

•H 

3 

0) 

3 

'O 

4-1 

rH 

3 

3 



•H 

•H 

3 

3 

3 

03 

4-J 

jv 

rH 

4-J 

4-J 

03 




4J 

4-1 

O 

g 

T3 

rH 

3 

3 

pH 

3 

rH 


4-J 

4-1 

0 

P 

03 

rH 

3 

(J4 

3 

3 

3 

3 



T3 


cd 

cd 

*H 


3 

3 

a) 

3 



3 


3 

3 

•H 


3 

3 

3 


3 

Hi 

3 




a 


2 

z 

rH 

O 

M 

•H 

g 

O 

Hi 

3 

4-> 


Z 

5S 

rH 

O 

M 

•H 

g 

Hi 

O 

O 

O 

O 



cd 




rH 

rH 


>4 

3 

*H 

3 

4-1 

O 




rH 

rH 



3 

3 

3 

a 

a 

Hi 




05 

05 

•H 

ph 

a; 


C 

4J 

JC 

3 

H 


w 

w 

•H 

a 

3 


Hi 

-3 

Hi 


3 

Hi 



hi 


0) 

05 

,Q 

g 

o 

"d 

05 

3 

4-J 

4-> 



05 

0) 

^5 

g 

O 

03 

3 

4-J 

3 

o 

•H 

O 



cd 


O 

O 

'-Z 

05 

•H 

3 

> 

5S 

o 

CO 



O 

o 


3 

*H 

3 

> 

o 

PH 

CJ 

Q 

rO 



3 


H 

M 


3 

}-4 

O 

Q 






H 

Hi 


3 

Hi 

O 

9 





3 



>4 


O 

O 


P 

ph 

CQ 

O 






o 

O 


D 

PH 

CQ 

c3 





35 


3 


111 


All dollar figures are in billions of current dollars, except where otherwise noted. 






ACDA/E-156 



CM 

on 


H 

m 


st ON 

o vo in co 
• • • • 
CM CM CM 
o st 
00 rH 


CM 


CO 

vO 

st 


00 

CO 

CM 

O 

ON 

00 

m 

o 

m 

o 


• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 


st 

m 

rH 

St 

CM 

CM 

00 

vO 

ON 

00 

m 

rH 


St 

iH 

vO 

CM 

CO 

rH 

rH 

ON 


st 

rH 


CM 

CO 

rH 

St 


CO 


CM 


CO 

m 

"3- 


VO 

ON 

m 

00 

00 

CM 

m 

ON 

o 

m 

O 


rH 


m 

00 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

CM 

CM 

CM 

CM 

rH 


ON 


iH 

ON 

CM 

m 

co 

rH 

00 

vO 

vO 

r>. 

in 

o 

n* 

rH 

ON 


St 


00 

CM 

>t 

m 

rH 

00 


St 


CM 

co 

st 


CO 

ON 

*H 

n- 


»H 




rH 

CM 

rH 



•H 



rH 




rH 

rH 









rH 














VO 


vO 







CO 


rH 




O 


CM 

CM 

CO 

CO 


ON 

O 

CO 

CM 

vO 

ON 

CO 

vO 

VO 

O 

CO 

CM 

00 

m 

vO 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

CM 

o 

rH 

CO 

o 


vO 


ON 

CM 

o 

m 

CO 

O 

00 

vO 

CM 

vO 

m 

o 


O 

00 




00 

CM 

CO 

m 

ON 

i"- 


st 


CM 

CO 

St 


CO 

ON 

rH 



rH 




rH 

CM 

o 



rH 



rH 









r>. 


o 







rH 


CM 




o 


iH 


rH 

rH 

rH 

ON 

o 

m 

ON 

r>. 

CM 

vO 

st 

m 

00 

O 

o 

ON 

rH 

in 

st 

• 


• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

CM 

nO 

m 

00 

St 

ON 

00 

CM 

VO 

vO 

vO 

vO 

CM 

st 

ON 

00 

vo 


vO 

m 

o 


a) 

r** 

v£> 


CO 


00 

CM 

CO 

st 

vO 

vO 


CO 


CM 

CM 



CO 

ON 

u 

O 

n* 


rH 




rH 

CM 

nO O 



rH 



rH 





ON 


<0 

CO 

d 

a) 

QJ 

w 

o 

o 

B 


a) 

n 

cd 

s 

<U 




00 


in 


a 



rH 


m 



o 



vO 

St 

m 

o 

o st rH in 

B 

CM 

m 

00 

st 

o 


ON 00 00 

m 

CM 

• 

• 

• 

• 

• 

• • • • 

o 

• 

• 

• 

• 

• 


• • • 

• 

• 

m 

vO 

St 

ON 

00 

ON VO st ON 

u 

00 

rH 


ON 

00 


m oo rH 

m 

o 

m 

m 


CO 


n cm co n 


st 

m 


CO 



CM CM St 


CO 

o 



rH 


rH CM 


o 

r^- 


rH 



rH 



rH 







rH 





co 




</y 

</> 




<fi- </></> <J> 


</> 

</> 




4~t 

</> </> <o- 


</> 






a 


co 

M 

cd 


co 

Vi 

cd 


a) 

o 

cS 

no 

d 

cd 


co 

u 

a 


V) 

a) 

u cd 

3 P-. 

4-J 





rH 



CO 






rH 


O 

CO 

*H 

X 





H 

4J 

o 

O 


a) 




H 

4J 

O 


O 

a) 

no 

id 

X 




CJ 

u 

TJ 

X-N O 


M 




O 

o 

no 


rH 

Vi 

d 

4J 

cd 




d 

d 


^ rH 


d 




d 

d 


fi'S 


d 

Q) 

d 

H 





T> 

00 

v-/ 


H 




T) 

no 

oo 



4-1 

CL 

o 



CO 


O 

o 

in 

• • 


•H <D 




O 

O 

in 


• • 

*H 

X 23 

a) 


a) 


U 

u 

ON 

a) oo 


no co 


rH 


M 

M 

ON 

a) 

00 

no 

W 


B 


> 

u 

ai 

a* 

rH 

h m 


d d 


cd 


P* 

pu. 

rH 

4-J 

in 

d 

% 


o 


u 

a) 




<d ON 


<u a) 

rH 

a 





«d 

ON 

0) 

rH 


a 

0) 

(U 

u 

rH 

rH 

IH 

« rH 


CL IH 

cd 

o 


rH 

rH 

IH 


rH '—' 

P- 

cd 

X 

d 

4-J 

CO 

u 

id 

cd 

O 

v-/ 


X 0) 

Vi 

r-l 


cd 

cd 

O 



X 

Vi 

cd 

M 

id 

<D 

id 

a 

d 


H 

VH 

w o 

0) 



d 

d 


4J 


w 

a) 

H 


p2 

P^ 

d 

o 

o 

CO 

d x 



nO 

no 


o 

o 

CO 

d 

X 


TJ 


(U 



O' 

•H 

•H 

d 

o) a) 

no 

H rH 

Q) 

d 


•H 

•H 

d 

0) 

0) ’TO 

H 

0) 

iH 

H 

4-J 

no 


4J 

4-J 

o 

B no 

rH 

d «d 

Pn 

<d 

rH 

u 

u 

o 

0 

TO rH 

d 

Pn 

cd 

id 

r* 

a) 

T3 

id 

cd 

*H 

>» d 

a> 

a) d 



cd 

cd 

cd 

•H 

>> 

d <D 

(U 


d 

Vi 

3 

S 

d 

25 

2 

rH 

O M 

tH 

6 o 

Vl 

<u 

H 

23 

23 

rH 

o 

M *H 

g 

Vi 

o 

O 

O 

o 

id 



rH 

rH 

S* 

d *h 

a) 

H 

o 



rH 

rH 


2 

a) 

co 

CL 

a 

H 


CO 

CO 

*H 

a a) 


M 4J 

43 

cd 

H 

CO 

CO 

•H 

0- 

a) 

Vi 

43 

Vi 

Vi 

CO 

Vi 

u 

CO 

CO 

43 

B o 

TJ 

<u cd 

H 

4-1 


CO 

CO 

43 

B 

u no 

0) 

4-1 

a) 

o 


O 

id 

o 

o 


CD *H 

d 

> 25 

O 

cn 


o 

o 

v-/ 

<0 

•h d 

> 

o 

Ph 

CJ 

Q 

43 

a) 

u 

u 


d Vi 

O 

Q 




M 

Vi 


d 

Vi O 

O 





d 

>* 

o 

o 


33 P-. 

CO 

O 


f 


o 

O 



CV pq 

o 















112 









ACDA/E-156 


have many of the related economic characteristics of 1968-1969, when 
the pressures of the War economy were being felt the most. 

Case 5. Budget A : This is the solution that many pacifically-oriented 
people would like to see. It is at a polar extreme from the stance of 
Budget E. Although the minimal case may not be considered realistic, 
it is worthwhile going through some of the relevant calculations and 
analysis to see what the implications are. 

The principal ingredient for this case is a substantial level of 
disarmament that would bring defense outlays down to $42.2 billion by 
the end of 1972. This reduces the current dollar value of defense 
expenditures to nearly 50 percent of its peak level during the Vietnam 
War. A disarmament of this magnitude would have to come about as a 
result of new progress in disarmament talks. It is one of the situations 
that would free large resources for spending on the domestic environment. 

After the end of the present fiscal year in 1971.2, the pattern of 
defense expenditure cutback is more rapid than in the Budget B solution. 
Although, military expenditures are assumed to be cut back faster than 
in the Budget B Case, the number of men in the forces are not reduced 
more rapidly until 1972.2. They are considered to be at bottom when 
they reach 2.3 million men. 

To give a uniform treatment to each case, we have simulated this big 
disarmament pattern with and without compensatory economic policies. 

The more reasonable solution, however, is with compensation, which takes 
the form of public civilian expenditure offsets of $11 billion, a tax 
cut of 10 percent, a discount rate cut to a new level of 5.0 percent 
and an increase in unborrowed reserves above the control pattern. The 
easier monetary policies are the same as those used to compensate the 
Budget B Case, but there is so much more slack in the Federal govern¬ 
ment's budget with the larger disarmament that more socially significant 
expenditures can be allocated to the civilian sector. The compensatory 
solution has other Federal government expenditures rising by an increment 
that is almost twice as large as in the Budget B Case; correspondingly 
the rate of tax reduction is also doubled. 

Naturally, if disarmament were large and no public offsets were 
initiated, unemployment would rise to the worst heights among all the 
solutions calculated in this study. At the end of 1972, the uncompen¬ 
sated solution places unemployment at a position of more than 7 percent 
and on a rising trend. This is clearly unacceptable, but the offset 
case is much more desirable as an alternative. The unemployment rate 
appears to be stabilized in the neighborhood of 5.4 percent, and the 
new budgetary picture of the consolidated government accounts shows 
a deficit of only $1.0 billion at the end of 1972. Additional stimuli 


113 



ACDA/E-156 






On 


o 







no 


ON 




O 


• 


CO 

rH 

I s *. 


HO 

rH 

no 

r* 

st 

VO 

CM 

00 

st 

no 

O 

ON 

rH 

CM 

O 

CM 

XJ 


• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 



00 



G 


rH 

vO 

r* 

St 

00 

00 

O 

no 

rH 


v£> 

St 

st 

00 

00 

vO 

CM 

uO 

o 

Xi 


O'. 

CO 

*3- 


CO 


I s *. 

CM 

CO 

CM 

sr 

no 


CO 


CM 

rH 

CO 


CO 

O 


ON 

O 



rH 




>—1 

CM 

o 

r* 


rH 



rH 




G 


rH 

rH 









rH 










G 






















CO 






















*H 





rH 


I s * 







i-H 


r*» 




O 


ps 


CM 


O 

rH 

no 

rH 

no 

rH 

vO 

o 

St 

o 

rH 

no 

rH 

rH 

St 

r* 

no 

st 

u 

G 


• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

9 

• 

• 

• 

• 

• 

• 

• 

• 

• 


rH 

st 

CM 

St 

r*. 

00 

co 

no 

00 

r*. 

St 

CM 

sr 

r-* 

oo 

no 

O 

O 

no 

ON 

45 


I s * 

CO 

uO 


co 


r* 

CM 

CM 

CM 

CO 

no 


co 


CM 

CM 

st 


CM 

XI 


ON 

o 

r* 


rH 




rH 

CM 

o 

r*. 


rH 



rH 




o 


rH 

rH 









rH 










G 

Xi 

G 


. 



















G 

st 





















43 

• 




vO 


st 







43 


St 




O 

oo 

£ 

CM 

rH 

rH 

CM 

00 

m 

CM 

o 

r* 

CM 

co 

rH 

CM 

00 

no 

CM 

I s *. 

n 

r-* 

no 


co i"* 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

# 

• 

• 

• 

• 

• 

• 

XI 

G On 

rH 

rH 

o 

st 

vO 

00 

st 

st 

no 

CO 

rH 

O 

st 

VO 

00 

St 

vO 

O 

uO 

00 

cx 

M rH 

r>. 

rH 

st 


CO 


r-* 

CM 

CM 

CM 

rH 

st 


CO 


CM 

rH 

st 


CM 

G 

3 

ON 

o 

r* 


rH 




rH 

CM 

o 

I s * 


rH 



rH 




O 

xi 

rH 

rH 









rH 










X 

*H 43 
XI 





















G 

G 





















#v 

G CO 





















CO 



a- 

Xi 

G 





vO 


CO 








vO 


CO 





O 


Xi 

G 


w 

r—! 

st 


VO 

uO 

CM 

CM 

CO 

in 

co 

I s *. 

St 


vO 

n 

CM 

CM 

CO 


CO 

st 

CO 

no 

CM 

rH 



rH 

• 


♦ 

• 

• 

• 

• 

• 

• 

• 

• 


• 

• 

• 

• 

• 


• 

• 

• 

• 

• 

rH 


G 

O 

O 

XJ 

st 

CM 

no 

vO 

00 


st 

CM 

rH 


st 

CM 

no 

vO 

00 


St 

vO 

00 

no 

00 

O 


CO 

XJ 

r* 

G 

00 

CM 


CO 


r* 

CM 

CM 

CM 

XJ 

00 

CM 


CO 



CM 

rH 

CO 


CM 

XJ 


G 


ON 

x) 

ON 



rH 




rH 

CM 

G 

ON 

r-* 


rH 




rH 






G 

CM 

rH 

G 










XI. 












XI 

vO 

4H 

r*. 


CO 










G 












G 


G 

ON 


G 










CO 












G 

G 

Q 

rH 


G 










G 












Xi 

*H 


VS 


CX 










G 












Xi 

43 

i 



a 










& 












3 

G 


G 


■ o 



vO 


CM 





a 



vO 


CM 





no 


CJ 

H 

G 

O 

CO 

a 

St 

oo 

O 

CM 

St 

o 

On 

I s * 

vO 

o 

st 

00 

O 

CM 

St 


ON 

m 

I s * 

I s * 

VO 



O 

♦H 

• 

G 

• 

• 

• 

• 

• 

• 

• 

• 

• 

<_> 

9 

• 

• 

• 

• 


• 

• 

• 

• 

• 

1X1 


*H 

iH 

o 

33 

CO 

vO 

no 

no 

00 

no 

CO 

o 

ON 


CO 

vO 

no 

no 

00 


co 

no 

ON 

UO 


O 


Xi 

rH 

r*. 


00 

CM 


CO 



CM 

CM 

rH 


00 

CM 


CO 



CM 

rH 

CO 


CM 



3 


ON 


ON 

r>* 


rH 




rH 

CM 


On 

I s * 


rH 




rH 




CO 


rH 

43 

rH 

















CO 






G 


O 




cry 

cry 




cry cry cry 

cry 


cry 

cry 




XI 

cry 

-CO- 

cry 


-co- 

O 


C/3 CM 
* 

<£ CM 
ST 
XJ </> 

G 

00 O 
XJ x» 
3 

CQ rH 


(0 

Xi 

G 


CO 

Xi 

g 


O) 

o 

G 

Pi 

X) 

G 


CO 
-u 
G 

co S 


G 




»H 

/—\ 





rH 

/*N 


3 




rH 

o 

CO 




rH 

o 

CO 

XT 


XI 

xi 

o 

o 

G 


X) 

XJ 

o 

o 

G 

W 


O 

CJ 

XJ 

/S rH 

U 


o 

O 

XJ 

/-s rH 

U 



3 

3 


8 s ? 

3 


3 

3 


6 s ? 

3 



XJ 

XJ 

OO 

vs 

XI 


XJ 

XJ 

00 


XI 



O 

O 

LTV 

• • 

*H 

G 

o 

o 

in 

• • 

*H 



Xi 

Xi 

ON 

G 00 

X) 

CO 

Xi 

Xi 

ON 

G 00 

XJ 


Xi 

Pm 

Pm 

rH 

xi no 

G 

G 

Pm 

Pm 

rH 

Xi no 

G 


G 




G On 

G 

G rH rH 




G ON 

G 


G 

M 

G 

xj 

•rH 

TJ 

G 

(U 


G 


xj 

G 


cx o 

X 53 


X 

G 

H 

(0 

G 8M» a) 

a 


x> 

u 

G 

3 

O' 

XJ 

G 

G 

Xi 

G 

G 

>* 


G G 
G G 
O O 


G G 

2S JZ 

CO co 
CO CO 

o o 

M Xi 

o o 


o 


8 s ? 


a- 


o 

o 


co 

G 

O 


xj 
G 

§ 

>3 

rH O 
«H rH 
*H {3* 

x> a 

ss <U 

G 

33 


X 

G 

X) 

G 


0) 

o 


. . <u M 

W Q G 


G 


X» rH 

G 


§ 


C 

O 


G 


U 

G 


O 

G 

G 

O 


__' 

8 s ? 

X 

Xi 

G 

H 

O 

G 

G 


XJ 


\_/ 

w 

G 

H 


rJ 

O 

O 

CO 

G 

X 



XJ 


G 

^3 rH 

*H 

•H 

c 


G 

XJ 

XJ 

G 

rH 

Xi 

XI 

XI 

o 

a 

XJ 

rH 

G 

Px 

G 

G 


G 


XI 

O 


XJ 
•H C 
Xi O 
Pm PQ 


M XJ 4- G H 
® G UU 
> 2 O CO 


cS 


G G 

Z 25 

CO CO 
CO CO 

o o 

M Xi 

o e> 


*H J>> 
rH o 
rH rH 
iH CX 

43 a 

ss q) 

G 

33 


G 

O 


G 

•H 


XJ 
*H C 
U O 
Pm PQ 


G - 
G ' 


G 
Xi O 
G CO 


Xi 

W 4 HI 

> o cx 
o 


u 

o 

CX 

H 

O 


> 

u 

G G 

G G 

Pi 

•*-* XJ 

G G 


tH 


O 
O 
co 

•H _ 
u Q 43 
G 
3) 


o 

H 

O 


•H 

43 


G 

Xt 

G 

CO 

G 

Xi 

3 

00 

•H 


Xi 

G 


O 

XJ 


G 


114 











ACDA/E-156 


0- co 



CM 

o 

rH 

vO 


CM 

m 

uo 

• 

• 

• 

• 

• 

• 

• 

• 

• 

CM 

VO 


r*v 

o 

r^» 

CM 

vO 

CM 

r*-. 


*<r 


■O’ 



CM 

<1- 

ON 

o 

r>- 


rH 




rH 

rH 

f~i 









CO 

O 

m 

o 

00 

CM 

rH 

00 

m 

<* 

Kj- 

• 

• 

• 

• 

• 

• 

• 

• 

• 

CM 

<r 

<r 

vO 

O 


oo 

vO 

o 

r>- 

ON 

rH 

o 

rH 

<r 


rH 



CM 

<r 

rH 


CM 

rH 

CM 

vO 


ON 

00 

m 

CO 

CM 

• 

• 

• 

• 

• 

• 

• 

• 

• 

CM 

o 


vO 

ON 


<r 

vO 

00 

ON 

rH 

o 

rH 

<r 

r>. 


CO 

rH 


m 

CM 

CO 

rH 













OO 





<T 


VO 




V 

rH 


CM 

ON 

m 

CM 

ON 

m 

CM 

O 

0 

• 


• 

• 

• 

• 

• 

• 

• 

• 

d 

• CM 

T3 

<r 

CM 

VO 

ON 


o 

vO 

vO 

*H 


03 

CO 



CO 


vO 

CM 

CO 

U 

ON 

u 

o 

r^ 


•H 




rH 

C 

rH 

03 

«H 








o 


03 









a 


d 











a> 











Cu 









vO 


Si 











o 



00 


CO 




03 

Mf 

o 

CM 

ON 

00 

rH 

o 

m 

O 

r-» 

rH 

tt 

d 

• 

• 

• 

• 

• 

• 

• 

• 

rQ 

rH 

d> 

CM 

rH 

in 

On 

00 

m 

vO 

CO 

03 

r- 


CO 



CO 


vO 

CM 

CO 

H 

ON 


O 

r^. 


rH 




rH 


rH 


rH 











</> 

co- 




</> 

•CO- 

-co- 





/—v 









03 









M 









CD 









iH 









rH 


o 

03 




4-1 

4-4 

O 


o 

o> 




a 

O 

T) 


rH 

u 




d 

3 








T) 

T3 

00 

'w' 


u 




O 

O 

m 


• • 

*H <D 




u 

U 

ON 

oJ 

oo 

nO 03 


rH 

u 

ph 

ph 

rH 

4-4 

m 

d d 


CD 

a> 




CD 

ON 

(1) 03 

rH 

O 

u 

rH 

rH 

*4-4 

Od 

rH 

CU <4H 

CD 

o 

u 

CD 


O 


' i3^2 

X <13 

u 

H 

tt) 

d 



4-4 

v-x 

W P 

03 


3 

o 

O 

03 

d 

X 


nO 

no 

O' 

•H 

*H 

d 

cu 

a) t) 

4-4 rH 

03 

d 


4-1 

4H 

o 

S 

'O rH 

d <D 

Pm 

cD 

T) 

CD 

CD 

*H 


d a3 

03 d 



d 

Z 

S3 

rH 

o 

HH >h 

0 O 

U 

03 

Cti 



rH 

rH 

>< 

d *h 

03 

4-4 


03 

03 


a 

a) 

H 4-4 

x: 

CD 

u 

03 

03 


S 

a no 

03 CD 

4-1 

4-4 

cD 

O 

O 

'_' 

0) 

*H d 

> 53 

o 

CO 


a* u u Guo q 

>« O O ID Ph PQ U 


CM 



vO 


m 




O 


00 

rH 

-<r 

rH 

vO 

-o- 

CM 

r^. 

o 

rH 

• 

• 

• 

• 

• 

• 






rH 

CM 

r^. 

in 

rH 


r^- 


r->. 

m 

m 

rH 

00 

vO 


-<r 


CO 

rH 

co 


co 

CM 

o 



rH 



rH 





rH 











o 


VO 

35 

vO 

o- 

O'- 

O 

rH 

CO 

o 

o 

rH 

• 

• 

• 

• 

• 

• 






n 

m 

<1- 

m 

o 

O'. 

n 

m 

00 

m 

-<r 

rH 

CM 

o 

rH 

vO 

r-- 


rH 


CO 

rH 

rH 

co 


CO 





oo 


CO 




o 


o 

rH 

00 

co 

o 

00 


rH 

CM 

o 

rH 

• 

• 

• 

• 

• 

• 






ON 

r-. 

rH 

m 

o 

r"- 

CM 

CO 

ON 

in 

CO 

rH 

vo 

vO 




co 

rH 

co 


CO 

CM 

O 

r-. 


rH 



rH 





rH 
















CM 


rH 





o 




CO 


ON 



ON 


ON 

ON 

CO 

o 

rH 

• 


• 


• 

• 

• 

• 







CM 


r- 



m 

On 



O 

o 

o 

m 

CM 

CM 

T) 

m 


in 


CO 



co 

rH 



CO 

CM 

03 

o 




rH 




rH 





4-4 

rH 













CD 














CO 














d 














S3 














& 














0 




rH 


o 





o 


rH 

O 

m 


CO 

O 

CM 

o 


o 

in 

00 

o 

rH 

• 

CJ 

• 


• 

• 

• 

• 


• 

• 

• 

• 

• 

m 


o 


<r 

m 

ON 

00 


ON 

co 

r>* 

m 

rH 

CM 


m 


in 


CO 



CM 

rH 

co 


CO 

CM 


o 




rH 




rH 






rH 






co 






■co- 


CO- 


CO- 




4-J 

co- 

CO- 

co- 


CO- 









PH 














*H 














0 ) 


CO 










, 


o 


4-4 












03 


d 












P^ 


0 ) 













CO 

0 








CO 




no 

03 

Po 








u 




d 

H 

CD 








CD 




CD 

d 

PH 








rH 


✓—N 



4-1 









rH 


o 


CO 

•H 

X 






4-1 

4 -J 

o 


o 


0 ) 

no 

cD 

X 





O 

u 

no 

/—\ 

rH 


d 

d 

U 

<D 





d 

d 


6^2 



d 

03 

d 

H 





-d 

nj 

00 

'w' 



4-1 

Cu 

o 



CO 



o 

O 

m 


• • 


•H 

X 


03 

6^2 

03 



H 

H 

On 

0 ) 

00 


no 

w 


0 

V-/ 

> 



PH 

Cm 

rH 

4-1 

m 


d 


< 4 ) 

O 


u 






cd 

ON 


03 

rH 


O 

03 

03 



rH 

rH 

IH 

PS 

rH 

/—N 

pH 

CD 

X 

d 

4-4 

CO 



cD 

<D 

o 


v 

&*2 

X 

U 

cD 

i—i 

CD 

03 



d 

d 


4-1 



W 

03 

H 


Pi 




o 

o 

CO 

d 

X 



no 


03 





•H 


d 

03 

03 

nO 

4-1 

03 

rH 

4-1 

4-1 

no 

rH 


4-1 

4-4 

o 

0 

no 

rH 

d 

Pm 

cD 

cd 

rt 

0) 

CD 


<D 

cD 

•H 

>N 

d 

03 

03 


d 

U 

3 

£ 

4J 


T* 

53 

rH 

o 

tH 

•H 

0 

U 

O 

O 

o 

o 

o 




rH 

rH 


>* 

d 

03 

CO 

CH 

o 

u 

H 


CO 

CO 

•H 


<13 


H 

rC 

H 

H 

CO 

J-4 



CO 

CO 


0 

a 

no 

03 

4-1 

03 

O 

•H 

o 



o 

o 

V-r 

0) 

*H 

d 

> 

O 

PH 

o 

Q 

JO 



H 

u 


d 

M 

o 

Q 





d 



O 

o 



PH 

PO 

O 





p 


115 








Table 7 

Budget A Solution with Strong Compensation a 

Defense Expenditures Equal to $42.2 billion (1972 dollars) by 1972.4 

& Quarter 1970.3 1970.4 1971.1 1971.2 1971.3 


ACDA/E-156 




H 


H 








in 


NO 





nO 

H 

00 

nO 

oo 

CO 

rH 

oo 

rH 

Ml- 

00 

n* 

r- 

r- 

CO 

o 

CO 


rH 

CM 

nO 

CO 

00 

r». 

00 

nr 

m 

rH 

CM 

CM 

rH 

co 

rH 

n- 

00 

rH 

n- 

NO 

nO 

nO 


CO 


CM 

o 

co 

CO 


CM 

ON 




nr 

fH 

co 

CO 

O 



rH 



H 



ON 

iH 

C". 


rH 



rH 



rH 









H 

rH 











ON 


co 








00 

rH 

co 





ON 

ON 

00 

m 

ON 

H 

ON 

nr 

H 

CO 

m 

tH 

00 

• 

nr 

in 

00 

On 

rH 




















00 

nr 

CO 

r-» 

r>- 

m 

o 

iH 

o 

CM 

rH 


co 

nT 

r-. 

co 

00 

r-. 

in 

CO 

m 


co 


CM 

CM 

nr 

CO 


H 

00 


H 


nT 

o 

co 

CO 

o 

r^. 


rH 



rH 



ON 

H 






H 



H 









iH 

H 











nr 


nO 








CM 


H 





nO 

00 

n- 

nO 

O 

r-- 

00 

H 

CO 

CM 

CM 

CM 

O 

m 

in 

H 

in 

CO 

rH 

CO 

iH 


nO 

00 

nr 

vO 

rH 

ON 

CM 

ON 

CM 


o 

r>* 

ON 

NO 

00 

nr 

rH 

nr 


CO 


CM 

rH 

nT 

CM 

n- 

ON 

00 


nr 


CO 

o 

CO 

CO 

o 

r^. 


H 



rH 



ON 

o 



H 



rH 



rH 









H 

rH 












CO 


rH 








r". 


o 






CM 

CM 

CM 

CM 

CO 

m 

m 

m 

H 

NO 

o 

rH 

00 

NO 

m 

o 

CM 

H 

m 

CO 

m 

NO 

00 

nr 

NO 

00 

oo 

CM 

NO 

n- 

nr 

ON 

r". 

m 

nr 

ON 

CO 

00 

CM 


CO 


CM 

iH 

CO 

CM 

I"- 

00 



CO 


co 

o 

CO 

CO 

ON 

r- 


H 



rH 



ON 

o 

i"*. 


tH 



rH 






NO 











rH 


o 






nr 

00 

o 

CM 

CO 


ON 

in 

rn. 


nr 

m 

rH 

00 

nr 

i"- 


ON 

co 

CM 

H 

CO 

NO 

m 

m 

00 


CO 

m 

ON 


H 

m 

rH 

CO 

ON 

r^. 


rH 

NO 

NO 

CM 

00 

CM 


co 



CM 

rH 

CO 

CM 



n- 


CO 



CO 

o 

CO 

CO 

ON 

n- 


rH 




rH 



ON 

o 



rH 




rH 








co 





rH 

H 





cn 





</> 

</> 


-CO- 


4J 

</></></> 

•co- 


-co- 

•co- 




4-1 

</> 

•co- 

-co 

-CO 


u 

cd 

QJ 

>* 


4-1 

U 

G 

X 

o 

u 

Pu 


cd 

g 

o 

H 

u 

cd 

53 

CO 

CO 

o 

u 

o 


4J 

(J 

G 

X 

o 

U 

PU 


CO 

M 

cd 


o 

X 

00 

m 

ON 


o 

o 




rH M-l 

cd o 

G 

o co 
*h a 
H o 
Cd H 
2 .H 
rH 
CO *H 
CO £> 

o ^ 
u 

o 


OJ OO 
4-j m 
cd on 
cG 


4-» 

G 

a) 

S 


X 

OJ 

X 


G 

O M 


CL QJ 
0 O 
QJ *H 
C J-i 


--' 

x 

tH 

0) 

•H 


X 
G 
o 

PU PQ 


a 

•H 

QJ 

a 

a) 

c*J 

X 

s 

CO 

qj 

j-i 

G 

4-1 

•H 

X 

G 

QJ 

& 

W 


G 

§ 

G 

J-i 

QJ 

> 

8 


cd 

j^ 

QJ 

X 

QJ 

Pu 

U 

QJ 

JG 


CO 

4-1 

G 

§ 

to 

cd 

PU 

X 


o 

2 


cd 

H 


G 

O 

co 

J-I 

QJ 


co 

cd 


Cl. 

•H 

QJ CO 

a 4-> 

QJ G 

PG QJ 

CO 0 

xj a) In 

G j-i cd 

Cd 3 PU 







tH 





4-1 








iH 


o 


CO 

•H 

X 


X 



4-) 

4-1 

o 


o 


QJ 

X 

cd 

X 

cd 

CO 


CJ 

o 

X) 

N 

H 


J-i 

CJ 

4-» 

cd 

H 

QJ 


G 

G 





G 

QJ 

G 

H 


> 


X 

X 

00 

n/ 



4J 

CL 

O 


QJ 

J-i 


o 

o 

in 


• • 


•H 

X 

53 

QJ 

0 

QJ 


J-I 

J-I 

ON 

QJ 

00 


XJ 

W 


0 

o 

CO 


PU 

PU 

rH 

4-1 

m 


G 


<-3 

O 

CJ 

QJ 





cd 

ON 


QJ 

tH 


o 

c 

CG 

J-i 

rH 

I—1 

lw 

w 

tH 


a 

cd 

X 

G 

M 


QJ 

cd 

cd 

o 


Nw/ 

S'? 

X 

J-I 

cd 

M 


X) 

4J 

c 

G 


4-1 


N-r 

w 

QJ 

H 


QJ 

QJ 

>-l 

o 

o 

CO 

G 

X 



X 


QJ 

4-> 

S 

cd 

H 

*H 

G 

QJ 

QJ 

XJ 

4-1 

QJ 

rH 

4-1 

cd 

O 

G 

4-» 

4-1 

o 

0 

X) 

H 

G 

Fh 

cd 

Cd 

j-i 

J-i 

O' 

cd 

cd 


>> 

G 

QJ 

QJ 


C 

J-I 

o 

u 


53 

53 

rH 

o 

IH 

•H 

0 

J-i 

o 

O 

PU 

o 




*H 

t — 1 



G 

aj 

CO 

CL 

>-i 



CO 

CO 


CL 

QJ 


J-i 

x: 

J-I 

J-l 

o 

G 

J-i 

CO 

CO 

,3 

0 

O 

XJ 

QJ 

4-1 

QJ 

o 

u 

53 

cd 

o 

o 

V 

QJ 

•H 

G 

> 

o 

CL, 

o 



QJ 

Jj 

u 


G 

J-i 

o 

Q 






>-< 

o 

o 


13 

P-4 

PQ 

O 





CO 

QJ 

> 

J-i 

QJ 

CO 

oj 

cG 


o 

>-i 

u 

o 

c 

53 


cd 


116 


All dollar figures are in billions of current dollars, except where otherwise noted. 














ACDA/E-156 


could well be applied to achieve some faster growth and lower unemploy¬ 
ment without too much pressure on prices or the budget position. 

The main point to be inferred from these extreme calculations is 
that fairly mild stimuli ought to be able to keep a major recession 
from developing and have the economy on a track on which real output 
is steadily growing. When the initial impact occurs, just after a 
temporary surge of activity programmed into the Control Solution for 
making up auto strike losses and hedge buying of steel in early 1971, 
there is a slowdown and leveling in real GNP for two quarters, but 
recovery is noticeable. 

The growth rate of real GNP stays well below potential even after 
the indicated compensation, but the associated rate of inflation is 
sufficiently low and the trade balance is sufficiently strong that 
easier monetary and fiscal policies than those assumed could be con¬ 
templated in order to bring the unemployment rate down another full 
percentage point or more. 

While the compensation for disarmament under this minimal case is 
reasonable and politically feasible, and produces not too bad an out¬ 
come, it is still interesting to ask, what would be required to keep 
the economy on a full employment growth path while substantial demobil¬ 
ization and military cutbacks are in process? Sufficient but not 
necessary conditions for a strongly compensated case of Budget A can 
be worked out in a balanced policy involving some further easing of 
monetary policy, and additional fiscal stimuli—higher civilian spend¬ 
ing and lower taxes. 

Keeping defense spending and the size of the armed forces the same 
as in the other Budget A cases, we have increased unborrowed reserves 
to a figure that reaches $1.0 billion over the previous case (Table 6, 
Compensated), starting with an increment of $0.1 billion in 1970.3 and 
gradually working up to a spread of $1.0 billion. Jn addition, we have 
assumed other (unspecified) actions by the monetary authoritie^ that 
would lower short term rates by approximately 60 basis points. These 
monetary actions bring borrowing costs down and raise fixed capital 
formation, both nonresidential and residential. 


A basis point is a technical financial expression. It is 1/100 
of an interest rate stated in percent. Thus, if rates fall from 7.8% 
to 7.5%, they fall by 30 basis points (7.8-7.5 = 0.30). 


117 





ACDA/E-156 


The fiscal side of the strongly compensated case consists of two 
parts. There is an increase in civilian expenditures amounting to $10 
billion over the previous compensated case by 1972.4 and a cat in taxes 
(corporate and personal) of 10 percent. The tax cuts begin with full 
measure in 1971.3 and continue until the end of the calculation in 
1972.4. The expenditure increases begin in 1971.3, but do not reach 
their maximum size until 1972.4. 

These policies bring about an infusion of $20 billion more into the 
spending stream, above the previous compensation and are accompanied 
by easier credit terms. In addition, the new civilian expenditures 
are put into a program by government in which more employees are hired 
and paid wages from public funds. This type of expenditure has an 
immediate impact on total employment. In the previous compensation, 
it was assumed that the added civilian expenditures would be made in 
the private sector for types of community projects that currently have 
high, priority. 

Tie outcome of this sufficient , super compensation program is highly 
favorable as far as aggregate economic performance is concerned. The 
unemployment rate is held near 4.0 percent for the entire period of 
disarmament. The inflation rate is a bit higher than in the lightly 
compensated case, but not alarmingly so. The major issue is that a 
full compensation program costs money, and the government deficit is 
much larger. The public authorities have to be willing to pay the 
price of a large deficit if full employment growth is to be obtained. 

It is worth pointing out that the full employment peace budget generates 
a deficit that is only slightly more than at the worst of the Vietnamese 
War. The average deficit for 1971 and 1972 comes to $15 billion for the 
strong compensated disarmament program, while the deficit in 1967 was 
almost $14 billion. With higher unemployment, we are likely to experi¬ 
ence a deficit approaching $10 billion in calendar year 1970, and this 
may grow to a larger figure for fiscal year 1970. ; 


III.4 SOME CAVEATS AND CONCLUSIONS 

The principal conclusion to be drawn from these econometric simulation 
calculations is that war, peace, disarmament, demobilization, and 
similar phenomena have major effects on the U.S. economy, but not so 
great that the system is sent into a spiraling movement one way or 
another between our polar assumptions of Budget E and Budget A. The 
movements of output, employment, prices, interest rates, and other 
variables are plausible for the various sets of assumptions and the 


118 




ACDA/E-156 


differences among solutions are all in the right direction. The real 
output implications of the various solutions are probably the firmest 
from a quantitative viewpoint. The amplitude of the price index and 
average bond yield are modest and may underestimate the pressures of 
inflation or the impact of swings in monetary policy. The unemployment 
rate moves in a narrow range, but this is partly accounted for by com¬ 
pensatory policies. The control solution estimate of the unemployment 
rate is about 0.2 percentage points below the actual estimate for 1970.3; 
therefore, the projections of increases to a level beneath 6 percent, 
under all but the worst of circumstances (Budget A - n<g offsets) , may 
be low by a fraction of a percent, say 0.2-0.3 points. 

The initial point of these calculations (mid 1970) comes at a time 
when public economic policy combined with moderate demobilization and 
reductions of defense spending have worked hard and long to slow down 
the economy. Some aspects of the slowdown, particularly the unemploy¬ 
ment rate have been slow in responding but are now showing the effects 
of the deflationary policies with slight exaggeration. The simulation 
calculations are based on average behavior and are smoother than reality. 
In particular, the random errors associated with each evaluation of 
an econometric model are assumed to be zero (their average values) 

for these calculations. If we were to make stochastic simulations, 
the amplitude of movement, at the extremes, would undoubtedly be 
larger, but we do not know the values of these random shocks for any 
particular period. That is why we assign zero (mean) values to them. 

The demobilization of a hundred or more thousand men will, of course, 
provide a substantial and direct augmentation of the civilian labor 
force. This accounts for the rise in the unemployment rate after this 
phase of the simulation begins. In addition to the offsetting policies 
that we have explicitly introduced, there are some other things that 
might affect the outcome. 

Many of the Vietnamese veterans will take up studies and not enter 
the labor force. There may be some good benefit payments in the form 
of transfers. The young men who are demobilized may have a high pro¬ 
pensity to spend on cars and housing from accumulated pay reserves. 

We did not build these special factors into the solutions, but they 
will generally serve as stabilizing forces in the economy. 


®If there is a downward bias it probably is not constant for all 
levels of unemployment. 


119 



ACDA/E-156 


The conclusion of the Korean War was followed by a substantial 
recession, the second in the post World War II period. Approximately 
500,000 men were demobilized; real GNP fell for four quarters; and the 
unemployment rate more than doubled over its Korean low value (under 3 
percent). The military budget was reduced by roughly 20 percent. In 
terms of men and dollars of spending, we are saying that the present 
peace settlement could be of the same dimension. 

i 

Peace negotiations dragged on for many months at Panmunjom in much 
the same way that they have in Paris; therefore we cannot say that peace 
came suddenly and found the nation unprepared economically for the 
change from military to civilian activities. The Federal government 
was slow, however, in enacting tax relief after Korea or in providing 
general fiscal stimuli to the economy. Now we appear to be much more 
aware of the issues and find the economy presently in the midst of many 
sources of long run support. The external environment is different now. 
Much of this is reflected by all the exogenous inputs into the Wharton 
Model and also by the lag structure, which places it in a particular 
historical setting. Our present calculations do not say flatly that a 
postwar recession will be avoided, but we do indicate combinations of 
policies that could bring about a smooth transition. Our patterns 
show a rise in unemployment and slowing down of growth during a short 
transition phase and then an approach to a longer run growth path for 
a peacetime economy, where there is more disarmament in addition to the 
cutbacks implied by a cessation of hostilities in Vietnam. Our main 
point is simply this: The U.S. economy can afford to have peace. 


120 





ACDA/E-156 


DIMENSION OF THE IMPACT OF REDUCED MILITARY 
EXPENDITURES ON INDUSTRIES, REGIONS AND COMMUNITIES 

John H. Cumberland 

IV. 1 IDENTIFICATION, MEASUREMENT AND PROJECTION 

OF REGIONAL ECONOMIC IMPACTS 

IV.1.1 The Nature of Regional Impacts 

IV.1.1.1 Introduction 


In addition to the general impact of changes in defense expendi¬ 
tures upon industries, the particular impact upon the subnational 
economies of various regions, states, and local areas is of special 
concern. Because the regional effects of changing defense expendi¬ 
tures are not evenly spread geographically throughout the nation, 
but may affect some regions and their industries more acutely than 
others, analysis of regional impacts of changing expenditures is 
critical in the evaluation of proposed changes in defense and other 
Federal expenditures. Therefore, following sections will examine the 
nature of regional economic impacts, methods for measuring and pro¬ 
jecting regional impacts, and alternative public policy approaches for 
dealing with problems of regional economic adjustment. 

The economic impact of reduced defense expenditures is a special 
case of the more general phenomenon of the effects of any changes in 
expenditures upon subnational economies. It is therefore important 
to examine the general nature of the impact of expenditure changes 
upon regional economies before proceeding to the special case of 
changes in defense expenditures. Expenditure impacts can be positive 
or negative, driving local economic activity levels upward or down¬ 
ward. Even in periods of reduced defense expenditures, some types 
of purchases may be rising in some regions, even though total expendi¬ 
tures are falling. 

IV.1.1.2 Direct Impacts of Expenditures 

The most highly visible and easily measured economic impact 
resulting from expenditures in a region is the initial purchase of 


121 




ACDA/E-156 


goods and services from sellers in the region. These are usually 
referred to as direct effects, or the first round of expenditures, 
and their magnitude is by definition equal to the size of the initial 
expenditure, which is also equal to the sum of value added by local 
firms, plus purchased inputs. 

These initial expenditures can be for procurement or other pur¬ 
poses. Any expenditures within a region by a Department of Defense 
installation within that region will exert direct impacts upon the 
regional economy as do the regional expenditures by the military and 
civilian employees of that installation. However, Federal procure¬ 
ment of military hardware, or software, is the classical example of 
the direct impact of defense spending upon a regional economy. 

For example, if the Department of Defense (DOD) purchases $1 
billion of aircraft from Los Angeles, the first-round, direct impact 
of that procurement action is precisely equal to $1 billion. While 
this type of expenditure is frequently cited as the regional economic 
impact of an expenditure in a local economy, it is by no means the 
sum total of economic impacts which will affect the region, nor is 
it the most significant measure of impact from the standpoint of 
economic analysis and public policy. Other kinds of impact which 
must be considered are the total expenditures in the region resulting 
from the initial procurement action and their eventual effects upon 
income and employment within the region. It is necessary to account 
systematically for the total of all impacts resulting from the direct 
impacts. 

IV.1.1.3 Indirect Impacts 

When expenditures are made in a region in order to purchase goods 
and services, it is necessary for the sellers of those goods and 
services in turn to purchase inputs of goods and services in order to 
produce the output purchased from them.^ Consequently the direct, 
first-round, impacts from the expenditures described above result in 
indirect impacts as producers purchase the inputs needed to permit 
them to fill their orders. For example, in order to produce $1 billion 


Expenditures within a region can also be viewed as the total of 
purchased inputs plus value added by firms within the region. Expendi¬ 
tures for value added are usually incurred within the region, but pur¬ 
chased inputs can be bought within the region, or from other regions. 


122 






ACDA/E-156 


of aircraft in Los Angeles, the seller must purchase goods and services. 
The aircraft producer’s inputs which he purchases for this purpose are 
the indirect purchases or second round of inputs needed to support the 
initial purchase. Similarly the producers of these inputs for the 
aircraft producer will in turn purchase inputs to meet their output 
requirements, resulting in successive, but diminishing rounds of 
indirect impacts. The indirect impacts from aircraft procurement appear 
in the region as increased activity levels of sales and income to all 
those activities within the region which sell outputs of goods and 
services needed for aircraft production. The magnitudes of the in¬ 
direct impacts within each industry within each region diminish as 
expenditures fan out to other industries and other regions with suc¬ 
cessive rounds of expenditures. While the dollar magnitudes of the 
impacts diminish with each succeeding round of indirect impacts, the 
total of indirect impacts may be significant, and must be accounted 
for systematically in order to measure the total impact upon a region 
resulting from any set of direct expenditures. 

A further problem in measurement comes from the fact that a 
regional economy is an open economy, subject to leakage of expenditures 
out of the region at every round of expenditures. In the national 
economy, except from leakages resulting from foreign imports, the sum 
of all rounds of indirect impacts will equal the total indirect impacts. 
But for an open regional economy, unless it is totally self- 
sufficient, some of the indirect inputs purchased to support aircraft 
production and other activities will be purchased from outside the 
region. Therefore, in a regional economv, the indirect impacts which 
are of interest are only those which are made within the region. From 
the viewpoint of the region, (but not the nation) all purchases of 
inputs from outside the region are leakages which will not affect 
total expenditures, income, or employment within the region, except 
for the feedback effects of purchases from within that region. Thus, 
Region A may benefit from leakages out of Region B, as for example 
when aircraft producers in Region B purchase inputs from Region A. In 
a highly industrialized, regionally competetive economy, part of the 
sales of every region depend upon sales to other regions which are 
leakages from the viewpoint of the purchasing region. Systematic 
identification and measurement of interregional flows is therefore a 
critical step in accurate definition and assessment of regional 
impacts of expenditure changes. 

The indirect impact on the Los Angeles economy of $1 billion in 
aircraft sales would be the sum of all sales in the region of goods 
and services to aircraft producers and their suppliers within the 
region. The magnitude of these indirect impacts would depend upon 



123 


ACDA/E-156 


such factors as the extent of vertical integration, how large and diver¬ 
sified the regional economy is, and how successful it is in competing 
with suppliers in other regions to meet the purchase requirements of 
aircraft producers. If a high degree of vertical integration exists 
in the aircraft production firm, that is, if the firm produces a large 
percentage of its component systems and produces them within the 
region, the indirect regional effects of aircraft procurement are 
likely to be much higher than if it purchases components and sub- 
assemblies from outside the region. Similarly, indirect impacts upon 
the Los Angeles economy resulting from aircraft production will be 
greater if subsequent rounds of input requirements are purchased in 
Los Angeles rather than from other regions. Thus, indirect regional 
economic impacts from initial expenditures in a region are likely to 
be much larger if the regional economy is large, diversified, competi¬ 
tive, and contains vertically integrated firms, than if the regional 
economy were small, specialized, competitively disadvantaged, and 
characterized by firms which depend mainly upon merely assembling com¬ 
ponents, subsystems and other inputs purchased from outside the region. 

However, the structural factors which work to the advantage of a 
region in periods of rising defense expenditures are precisely the 
factors which work to its disadvantage in periods of declining defense 
expenditures. Rising defense expenditures in a region which also 
supplies a large percentage of the indirect inputs to producers of 
procurement items generate positive regional income and employment 
multipliers, but decreases in defense expenditures in this type of 
region will generate corresponding downward multiplier effects. The 
reverse is also true. Regions which experience small multiplier 
effects from rising defense expenditures because of large leakages 
or purchase of proportionately large amounts of inputs from outside 
the region, will experience correspondingly less painful downward 
multiplier effects as defense expenditures fall. 

IV.1.1.4 Subcontracts and Indirect Effects 


The placement of subcontracts within a region represents a 
particular kind of economic impact. While the indirect impacts dis¬ 
cussed above represented purchases of standard goods and services 
used as inputs going into the production of items for delivery to 
military purchasers, some inputs needed for this purpose do not exist 
as standard items and must be specifically fabricated under contract 
in order to meet the needs of a military prime contract. Consequently 
the placement of a subcontract in a region by a prime contractor in 
the same region has the same effect as the purchases within the 


124 









ACDA/E-156 


region by that prime contractor of any other inputs, except that the 
items involved are non-standard and are specially produced by sub¬ 
contractors. 

From the viewpoint of Region A, subcontracts placed in the region 
by a prime contractor outside Region A have exactly the same signifi¬ 
cance per dollar to Region A as a prime contract placed in Region A. 

In producing to satisfy subcontracts, subcontractors may generate 
indirect effects upon Region A through purchase of standard items or 
through placement of an additional generation of subcontracts. Sub¬ 
contractors in Region A may also purchase materials and services and 
place subcontracts outside Region A, in which case these impacts 
become direct impacts in the region where the purchases are made. 

IV.1.1.5 Induced Impacts 

In estimating the total impact of defense or other expenditures 
upon a regional economy, it is essential to identify not only the 
direct and indirect impacts from successive rounds of input purchases, 
but also to recognize another class of economic impacts which result 
from purchases within the region by those who have earned income from 
the direct and indirect purchases noted above. For example, production 
of aircraft in Los Angeles not only results in sales by suppliers to 
the aircraft industry, but also in sales of consumption items to those 
who have earned income from employment in the aircraft industry and its 
suppliers within the region. The sales arising from increased incomes 
in the region are defined as induced impacts. The magnitude of the 
induced impacts upon a regional economy resulting from aircraft procure¬ 
ment depends upon such factors as the amount of income generated from 
d:.rect and indirect impacts, the commuting patterns of employees in the 
aircraft and aircraft supplying industries, the consumption functions 
of local households, and their propensities to spend their incomes 
within the region as compared with spending outside the region. Thus 
the magnitude of induced consumption expenditures in a region is likely 
to be higher to the extent that the initial direct and indirect expen¬ 
diture impacts occur in industries with high wage rates and large labor 
forces, and to the extent that members of the labor force live within 
the region and spend their incomes within the region. Conversely, the 
magnitude of induced consumption expenditures is likely to be low and 
leakages will be high to the extent initial expenditures occur in 
industries where wage rates are low, the labor force is small, workers 
reside in other regions, and spend their incomes outside the region. 

Here again, those structural factors which work to the advantage 
of a region in periods of rising procurement purchases work to its 


125 



ACDA/E-156 


disadvantage when defense expenditures fall. If direct defense 
purchases in a region generate high levels of indirect and induced 
impacts, the region will experience large upward multiplier effects 
in periods of high defense expenditures and large downward multi¬ 
pliers in periods of declining defense expenditures. Similarly, 
regions with large leakages from producing for defense will suffer 
less as procurement purchases are reduced. Thus the direct, in¬ 
direct, and induced economic impacts upon regional economies from 
changing defense (or other) expenditures are reversible. The same 
expenditure forces which drive up the activity levels in a region, 
if removed, can drive economic activity back down unless they are 
offset by alternative expenditures. 

IV.1.1.6 Structural Change in Regional Economies 

The effects of defense expenditures have been discussed thus far 
as they impinge upon existing regional economies, and affect expendi¬ 
tures, income and employment in existing activities. However, some of 
the most important regional economic impacts are those which cause 
dynamic change, which may be of several types. The first is capital 
growth in existing firms or industries which generates increased 
capacity and increased size of the local economy without necessarily 
changing the structure of the local economy. A second type of 
structural change is the addition of new kinds of industry or economic 
activity which had not previously been represented in the regional 
economy. This kind of impact represents both growth and change in the 
local economy. A third type of dynamic structural change in a regional 
economy is technological change in the production functions of indus¬ 
tries within the region. 

i 

In all cases of dynamic and structural change, it is important 
to distinguish between two different kinds of economic impact result¬ 
ing from these changes. The first is the investment phase of struct¬ 
ural change which occurs while plant and equipment are being constructed 
and put into place. The second type of economic impact occurs in the 
operating phase after the investment process has been completed. It is 
important to distinguish between these two phases because the types of 
inputs required to satisfy each are quite different and consequently 
the resulting economic impact upon the region differs during the 
investment phase and the operating phase. This distinction becomes 
particularly important in an area like Los Angeles where structural 
change becomes a continuous process and the regional economy adapts to 
an expectation of continued growth. Under these circumstances, many 
sectors of the local economy emerge to support the growth process. 


/ 


126 



ACDA/E-156 


The construction industry and other suppliers of capital plant and 
equipment for both industry and the supporting labor force are ex¬ 
amples of activities attuned to the creation of growth and structural 
change. 

Because that proportion of the construction industry which is 
building new plants and equipment for new activity in a rapid growth 
area is large relative to that proportion which is merely providing 
for replacement needs, a decline in growth, or in some cases even a 
reduction in the rate of increase in new construction, may result in 
serious negative impacts upon growth-oriented sectors of the regional 
economy. This is a regional manifestation of the well-known accele¬ 
rator principle, and it is important to note that it can operate in a 
positive or negative direction to magnify the economic impacts of 
changes in defense or other expenditures in rapid growth regions. 

IV.1.1.7 Local Income, Value Added, and Employment 

• The discussion thus far has examined regional economic impacts 
solely in terms of gross purchases and sales, which can be measured by 
totaling direct, indirect and induced effects. These are traditionally 
significant measures of economic impact, but from the viewpoint of the 
welfare of people who live in the region, the most important economic 
impacts are the net effects upon employment, and personal income. Other 
impacts are also important, such as those upon local government revenue 
and expenditures and upon the quality of the local environment. 

It is important to note the distinction between the induced 
expenditures discussed above, which are expenditures by consumers 
within the region and the more basic personal income, which is the sum 
total of incomes of individuals within the region. In a large region, 
these two items are likely to be very similar, but in a small non- 
self-sufficient region, part of personal income will be spent (and 
saved) outside the region. Therefore, while induced regional expendi¬ 
tures are closely related to the basic variable, regional personal 
income, the relationship of both of these variables to direct and 
indirect impacts is more complex. If the regional economy is small, 
and open to large expenditure leakages, then even very large expendi¬ 
tures in the region for prime contracts or other procurement actions 
may have very reduced impacts upon the incomes and employment of those 
who live in the region. 

In emphasizing regional personal income as the fundamental var¬ 
iable from the viewpoint of the region, it is also important to note 


127 




ACDA/E-156 


that per capita personal income is a more significant welfare variable 
than is total income. If total personal income is rising, but popula¬ 
tion is rising at an equal or greater rate, it is possible for the 
region to experience growth without necessarily experiencing an improve¬ 
ment in welfare. Maintaining full employment with high and rising 
levels of per capita personal income is the primary traditional 
objective of regional development. However, the process of generating 
added employment and income for an existing population in a region 
through increased aggregate spending can occur only if there are unem¬ 
ployed or underemployed resources within the region. If regional full 
employment already exists, the primary impact of added expenditures 
will be upon rising prices or upon imports, or both. 

IV.1.2 Selected Problems in the Identification, Measurement 

and Projection of Regional Economic Impacts 

All of the problems discussed in this study relating to the 
impact of changing defense expenditures upon the national economy are 
present in the measurement of regional impacts, along with additional 
regional complications. It is necessary in analyzing the problem to 
distinguish between the identification of the nature of economic 
impacts, the measurement of these impacts, and projecting the nature of 
these impacts in response to future events. The design of policies 
to deal with these changing impacts is still a separate problem. 

In the previous section, it was pointed out that it is important 
to recognize a range of different types of economic impacts, including 
t lose which are direct, indirect, induced, and those which eventually 
affect incomes and employment. In practice it is very difficult to 
separate these types of impacts, and to measure them empirically. It 
is even more difficult to forecast them for the future. 

A major problem in the measurement of economic impacts from 
defense expenditures is the fact that these expenditures are only one 
type, though a major type, of the total expenditures, which eventually 
affect the important policy and welfare variables of income and employ¬ 
ment. It is difficult to separate out those shares of income and 
employment which can be rigorously identified as having originated with 
a set of defense expenditures in an earlier period before these 
expenditures filter down through a network of prime contracts, sub¬ 
contracts, indirect inputs, incomes and employment. Most firms sell 
both to defense and non-defense purchasers, and a fraction of the 
income of most employees is affected by defense expenditures. 


128 






ACDA/E-156 


Even if defense expenditures could be traced from initial expendi¬ 
ture upon some weapon system down through incomes and employment, there 
is no assurance that future increases or decreases in defense expendi¬ 
tures would flow along the same networks, even for the same weapon 
system. Procurement officers may shift purchase contracts from one 
firm to another because of changes in bids, prices, performance, or 
other variables. Prime contractors may shift subcontracts between 
regions for similar reasons. Even in the process of supplying standard 
inputs of materials and services for defense contracts, patterns of 
interfirm and interregional purchasing may vary because of changes in 
price, quality, capacity, transport facilities, technology, or other 
factors. Structural, technological, and other changes take place 
continually in the economy. Under these circumstances, it is diffi¬ 
cult to isolate the effect of any one set of expenditures, and to 
forecast the effects of possible changes in that set upon the total 
system. 

When changes occur in the composition of defense expenditures as 
well as in the scale of those expenditures, forecasting becomes even 
more hazardous. When new weapon systems are authorized, previous 
procurement patterns are at best a tentative guide to future linkages 
between industries, firms, and regions. 

The impact of decreasing procurement expenditures presents a wide 
range of forecasting problems. When finis lose procurement contracts, 
there are numerous alternative responses. If the firm was established 
as a branch or other affiliate of an existing firm to produce for a 
particular contract, and if much of the plant, equipment, and capital 
was provided for that purpose by the DOD, contract termination may 
have a negligible effect, particularly if the work force is then trans¬ 
ferred to other operations of the firm. Or, the firm may be able to 
shift to production for other military procurement or for civilian 
production if a defense contract is terminated. If not, labor and 
management may be able to transfer to alternative job opportunities. 

At the other extreme, if alternative economic opportunities are 
not available to the firm or to its employees, severe economic distress 
may occur with sharp decreases in regional income, and increases in 
unemployment. 

Other difficulties in forecasting the regional economic impacts 
result from problems of timing and lags in the procurement process. 

Very long periods may intervene between the authorization and income 
generation phases. Another problem is that of the effects of informa¬ 
tion and forecasting upon decision making. Forecasting declines in 
/ 


129 


ACDA/E-156 


regional economic activity from decreases in defense expenditure may 
lead to action in establishing offsetting economic efforts and adjust¬ 
ment processes. 

The complexity of these and other regional economic impact 
problems, and their significance for national and regional economic 
policy have led to the development of an extensive literature on the 
subject, some of which will be reviewed in the next section. 

IV.1.3 Recent Contributions to Impact Analysis 

IV.1,3.1 Basic Data Sources and Direct Impacts 

The ability to make improved estimates of the impact of changes in 
defense and other expenditures upon the national economy and its regions 
will require advancements in both the collection of relevant basic data 
and in the development of conceptual models with which the data can be 
analyzed. An important new source of data on the direct impact of de¬ 
fense and other Federal expenditures on regional economies has been 
developed by the Office of Economic Opportunity as part of the Federal 
Information Exchange System.2 This is one of the most detailed and 
valuable sets of data available on Federal expenditures. The data are 
broken down by agency, by program, and by type of expenditure for every 
county and for political subdivisions defined as cities. Expenditure 
breakdowns vary by department. The reported total U.S. Department of 
Defense outlays for Fiscal Year 1968 are given in Table 1. These data 
are available on tape for counties and cities. 

Despite the detailed geographic breakdown of these data, they 
have some deficiencies from the viewpoint of analyzing economic 
impacts of changing defense expenditures. First of all, the amount: 
of program detail, especially for the Department of Defense, is minimal. 
The ten expenditure categories for the Department of Defense are based 
upon traditional class items, rather than upon programs, force levels, 
weapon systems, or other functional categories. Breakdowns for other 


Office of Economic Opportunity, Reporting Instructions for the 
Federal Information Exchange System, revised, January, 1968; Federal 
Outlays in Cities , Fiscal Year 1968, Volume 2, A Report of the Federal 
Government's Impact by State and County (compiled for the Executive 
Office of the President); Programs by Agency, National Summary For 
Fiscal Year 1968. 


130 











ACDA/E-156 


TABLE 1 

Department of Defense Outlays 
Fiscal Year 1968 


PROGRAMS 

Civilian Pay 

Military Active Duty Pay 
Military Reserve and National Guard Pay 
Military Retired Pay 
Military Prime Supply Contracts 
Military Prime RDTE Contracts 
Military Prime Service Contracts 
Military Prime Construction Contracts 
Civil Functions Prime Contracts 
Prime Contracts of Less than $10,000 

AGENCY TOTAL 3 


$ 8,786,691,000 
9 ,488 ,969,000 
997,445,000 
2,043,688,000 
23,010,943,000 
6,467,178,000 
6,942,008,000 
991,240,000 
801,562,000 
3,713,231,000 

$63,242,955,000 


SOURCE: Office of Economic Opportunity, Federal Outlays in Colorado: 

A Report of the Federal Government's Impact by State and 

County, Fiscal Year 1968, Compiled for the Executive Office 

of the President , Federal Information Exchange System, National 

Program Summary as of June 30, 1968 (Springfield, Virginia: 

Clearinghouse for Federal Scientific and Technical Information, 

PB180975, 1969), pp. 6-7. 

a Editor f s note: This figure compares with total DOD outlays of $78,207 

million for FY 1968 as reported in Department of De¬ 
fense, DOD Financial Summary, Table 1, dated 26 Janu¬ 
ary 1970, processed. 


131 






ACDA/E-156 


Federal departments are given in much more detail, some by program 
categories. Another major analytic problem with these data is that 
they deal with the geographic location of direct expenditures only, and 
give no insight into the geographic spread of sub-contracts, indirect, 
and induced expenditures. However, the existence of such a detailed 
information system for geographic distribution of direct expenditures 
does at least provide the basis for developing eventually a more 
analytically-oriented statistical information system. 

r 

Present Department of Defense accounting procedures are capable 
of providing even more detail on the location of direct expenditures. 

In fact, it is possible to account for Department of Defense expendi¬ 
tures down to the individual company level. Data available from the 
Department of Defense Directorate for Statistical Services actually 
indicate for each state the names of individual firms receiving prime 
contract awards of $10,000 and more (only awards above $25,000 for 
"Perishable Subsistence" are included).^ 

Although these data are intended to indicate the geographic 
location where the work is performed, rather than the home office 
address, they again do not provide information on the amount or location 
of subcontracting. One of the most impressive results of these data 
is their indication of the pervasiveness-and geographic spread of 
Department of Defense prime contracts, suggesting that the spread of 
subcontracting is probably even more diffused. Very few areas in the 
United States including even the smallest communities have been omitted 
from the roster of places receiving Department of Defense prime con¬ 
tracts in excess of $10,000. Despite this pervasiveness of DOD expendi¬ 
tures, some regions are more highly dependent upon them than others. 

It is not surprising that the prospect of possible reductions in arms 
expenditures raises widespread concern about the economic implications. 

Another important source of direct impact data is provided by the 
U.S. Census Bureau publication of the MA-175 series.^ These data 


Office of the Secretary of Defense, Directorate for Statistical 
Services, Prime Contract Awards of $10,000 or more, Fiscal Year 1968 
(Washington: Department of Defense, October 7, 1968). 

4 

U.S. Department of Commerce, Bureau of the Census, Shipments of 
Defense-Oriented Industries 1967 , Current Industrial Reports, Series: 
MA-175 (67)-2, August 11, 1969. 


132 


/ 








ACDA/E-156 


report shipments by 77 defense-oriented industries primarily to the 
Department of Defense, Atomic Energy Commission, and to the National 
Aeronautics and Space Administration. 


They include figures on value of shipments, employment, value 
added, and number of establishments. The data include various, but 
not complete breakdowns by industry, by government agency, by year 
(1965 through 1967), by region, by state, by Standard Metropolitan 
Statistical Area, by type of employee (production workers and all 
employees) , by type of cost (materials and supplies or services and 
other costs) and of activity (manufacture,.construction, R & D, other) 
and by other categories. Separate data are reported on manufacturing 
at government-owned and operated facilities. 

4 

The MA 175 series, with its wealth of information, provides a 
potential information framework for a comprehensive direct impact infor¬ 
mation system. At its present stage of development, however, a number 
of problems inevitably exist. Not all data can be shown by all 
relevant cross classifications. For example, data are not shown for 
all SMSA's, and even though all states are included, no industrial 
breakdown is given for states. Data are not included at all for non¬ 
manufacturing industries nor for some types of manufacturing indus¬ 
tries, and are compiled only from firms shipping $1 million or more 
of sales to Federal agencies. Data were excluded for most firms having 
less than 100 employees (or less than 50 in two industries). Some 
subcontractors and suppliers of materials and services were excluded. 

No indication of the level of subcontracting is reported. 

These omissions result largely from Federal statistical reporting 
policies designed to avoid disclosure of business information. This 
problem becomes acute as data are progressively broken down by indus¬ 
try, location, and other categories. Other omissions result from the 
fact that many producers are unaware of the extent to which their 
products ultimately are incorporated into shipments to Federal agencies. 
However, despite these problems, the MA-175 provides a comprehensive, 
consistent information system on shipments to Federal agencies and 
could be further developed as a basic source of impact data. 

Another important source of direct, first round expenditure data 
on military spending is the Economic Information System (EIS) developed 
jointly by DOD and NASA, beginning in 1961. The EIS data represent an 
effort to overcome some of the limitations of earlier DOD regional 
information systems such as the release on Military Prime Contracts 


p 


133 


ACDA/E-156 


Awards by Region and State. 5 These DOD data provide information for 
each state on prime contract awards of $10,000 or more, breaking the 
data down by 25 separate types of procurement programs. Separate 
breakdowns for procurement expenditures on RDT&E (research, develop¬ 
ment, testing and evaluation) are provided by type of contractor 
(educational institution, other non-profit and business firms). One 
problem with these data is that they do not necessarily provide direct 
information on the location of actual production, but report location 
of plant for final processing and assembly. Also, they deal with prime 
contracts only and omit subcontracting. They also report times of 
contract award, rather than time of work performance. 

From the standpoint of regional economic impact, the EIS data are 
superior in several respects. The EIS data are reported for time of 
work performance, rather than for time of contract award. They also 
impute the location of defense-generated industrial employment back to 
the plant level, rather than merely to the place of final assembly. 

The EIS estimates are also reported in terms of plant size, 
defense-generated employment (direct only, not indirect or induced), 
total employment, and the percentage of defense dependency for each 
state. The data are also reported by defense product group (aircraft, 
missile and space, ships, vehicles and weapons, ammunition, electronics 
and communication, RDT&E, and others). Coverage of all DOD civil 
service and military personnel by region is complete. Despite these 
advantages, the EIS data are subject to numerous information limita¬ 
tions arising from efforts to avoid disclosure of company information 
and to protect military security. They include direct impacts only 
without estimating corresponding multiplier effects. Coverage is 
limited to an estimated 75 percent of total employment impact. 


Office of the Secretary of Defense, Directorate for Statis¬ 
tical Services, Military Prime Contract Aw ards by Region and State, 
Fiscal Years 1967, 1968, 1969 (Washington: Department of Defense, 
October 27, 1969). 

6 See Vernon M. Buehler, "Economic Impact of Defense Programs," 
in U.S. Congress, 90th Congress, 1st Session, Joint Economic Com¬ 
mittee, Economic Effect of Vietnam Spending, Hearings before the 
Joint Economic Committee , Vol. II (Washington: Government Printing 
Office, 1967), pp. 870-888. 


134 









ACDA/E-156 


The results of the survey are valuable in indicating the changing 
pattern of direct impacts over time, to the extent that these were 
covered by the survey. They appear to indicate that higher regional 
defense dependency ratios are associated with small rather than large 
regions. They also confirm the hypothesis that shifts of military 
expenditure patterns between different defense product groups have a 
marked effect upon the regional distribution of expenditures over 
time, and that states vary greatly in their absolute and relative 
dependency upon military prime contracts for employment. 

A thoughtful and valuable analysis of the direct regional effects 
of defense expenditures during the increase of defense expenditures in 
Vietnam was prepared by Riefler and Downing, using data from the EIS.^ 
They emphasize the need to go beyond the direct impact data and to 
investigate the regional employment multipliers which result from this 
direct employment in defense activities, Riefler and Downing also 
emphasize the need to analyze the reaction and readjustment capability 
of communities to downward effects of these multipliers when defense 
expenditures fall. 

This brief and partial survey of some of the sources of data on 
direct impacts of defense expenditures suggests that while there is a 
vast amount of information available, the data have been collected in 
various forms for a variety of different purposes. Improved analysis 
of the defense impact problem will depend upon relating a comprehensive 
expenditures information system to an operational model for assessing 
total economic impacts. Some recent efforts to develop impact models 
will be examined in the next section. 

IV.1.3.2 Conceptual Models 

Because of the growing awareness that most high priority national 
policy problems contain inescapable spatial aspects, and because of the 
complexity of the problems involved in regional economics, the design of 
conceptual models for regional analysis has received increasing atten¬ 
tion from economists. A major objective of these efforts is to be able 
to move from analysis of the direct impact data discussed above to the 
analysis of indirect, induced and total impacts of expenditure changes 
on regions, 

^Roger F. Riefler and Paul B. Downing, "Regional Effect of 
Defense Effort on Employment," Monthly Labor Review , Vol. 91, No. 7 
(July, 1968), pp. 1-8. 


135 





ACDA/E-156 


Many different approaches have been used and there exists a grow¬ 
ing body of literature on the problem. An excellent survey of the 
literature through the Fall of 1967 has been prepared by Darwin W. 
Daicoff.^ He emphasizes the importance of improving the basic Federal 
statistics on Federal expenditures and their geographic distribution 
and discusses various types of analytic models which can be used to 
examine the direct, indirect, induced, and other impacts resulting from 
Federal expenditures. His study also includes a valuable annotated 
bibliography. 

An important addition to the state-of-the-art since Daicoff's 
survey is the Independent Study Board (ISB) Report on the Regional 
Effects of Government Procurement and Related Policies , to which his 
study was an appendix. In contrast to the present study which focuses 
upon the impact of changes in military expenditures and their effect 
upon employment by industry on the national, state, SMSA, and county 
level, the ISB report emphasized the impact of all Federal expendi¬ 
tures on the value of output of the nation and the states. Efforts 
were made to identify impacts upon counties, but the model used proved 
to be insufficiently sensitive for this purpose. 

Like this study, the ISB report did differentiate between direct 
and total impacts. The ISB report also, unlike this study, did sepa¬ 
rately measure direct, indirect, and induce.d effects (initial round). 
The ISB impacts were measured in terms of gross outputs rather than 
by total employment effects, as in this study. The analytic model 
used in the ISB report was a set of simulated regional interindustry 
models, one for each state, based upon national coefficients from the 
1958 Interindustry Sales and Purchases Model of the Office of Business 
Economics (OBE), with regional flows adjusted on the basis of location 
quotients. This model was developed by the CONSAD Corporation. 

Two major assumptions were made in the CONSAD Model. The first 
is that each state 1 s technical structure is the same as that of the 
nation as a whole. This assumption was necessary in order that state 


g 

Darwin W. Daicoff, "State-of-the-Art Study: Literature Review," 
in Appendices to Regional Federal Procurement Study Vol. I A-G, Repo rt 

of the Independent Study Board on the Regional Effects of Government 

Procurement and Related Policies (Washington: Government Printing 

Office, December 1, 1967). Prepared by the CONSAD Research Corporation 
for the Economic Development Administration, U.S. Department of 
Commerce. 


; 


136 









ACDA/E-156 


technical coefficients cotId be derived from national ones. Conse¬ 
quently, it ignored regional differences in resources, product mix, 
and production methods. The second assumption was that each state’s 
economy is completely self-sufficient to the fullest extent possible, 
so that there are neither imports nor exports unless the output of a 
given industry in a state fails to meet or exceeds the input require¬ 
ments of all industry in that state. This assumption allows for a 
consistent method of modifying national coefficients to determine 
imports and exports, but ignores the fact that state economies are 
freely open to trade from outside the state. 

The method used to modify national coefficients was that of loca¬ 
tion quotients based on gross outputs. To determine each industry’s 
location quotient, it is assumed that: 




ZGO. . 
J 



where 

= location quotient of sector i, state k 

= gross output of sector i, state k 

= total gross output of all sectors j, in state k, 
to which sector i, state k, sells 

= gross output of sector i, nation 

= total gross output of all sectors, j, in nation, 
to which national sector i, sells. 

A location quotient larger than one means a particular industrial 
sector in the state provides relatively more to other state sectors than 
does the corresponding national sector to all other industrial sectors 
at the national level. This state sector is, therefore, presumed to be 
exporting by the exact percentage amount that the location quotient 
exceeds one. 

A location quotient of less than one, on the other hand, means 
that a state sector provides relatively less to other state sectors than 
does the corresponding national sector to other industries at the 
national level. This state sector, therefore, is presumed to be unable 


LQ i, k 


GO 


i,k 


ZGO. , 
J tk 


GO. 

1 


ZGO. 

J 


137 




ACDA/E-156 


to meet other state sectors’ needs and these other sectors are then 
presumed to be importing by the exact percentage amount by which the 
supplying industry falls short of meeting state needs. Finally, a 
state sector with a location quotient of exactly one is assumed to 
bear the same proportionate relationship to other state sectors as does 
the corresponding national sector to all industry, nationally. This 
state sector is, therefore, assumed to provide exactly for the require¬ 
ments of all industry in its state for its product with no need to 
import or export. 

. 

Interregional flows of imports and exports are not specified 
by state of origin or destination. Exports from each industry are 
assumed to go into a national pool of exports from that industry, from 
which states with a trade deficit for that industry import, without 
respect to original state of production. In the case of input de¬ 
ficiencies in a state, e.g., steel, it is assumed that every industry 
in that state would import the same percentage of that input from 
outside the state. 

The main problem with the preceding assumptions is that there is 
no simple way of knowing the magnitude of the error they generate. 
Clearly, sector production functions in different states are not the 
same, and sectors do not import and export in the way the model assumes. 
The important question, however, is how much error is involved? This 
question can only be answered by empirical research on actual inter¬ 
regional interindustry flows. 

However, despite the limitations on the reliability of the actual 
numerical estimates of the CONSAD model, it does represent an imagina¬ 
tive and amibitious effort, using limited data and resources, to simu¬ 
late a national interregional interindustry model. On the basis of 
these simulations, the ISB was able to draw some policy conclusions, 
including the recommendation that the Federal government develop em¬ 
pirically observed interregional interindustry models. 

The ISB Report also concluded that although Federal procurement 
policies might have some role to play in redressing regional imbal¬ 
ances, this role would necessarily be limited because of the tendency 
of the indirect, subcontracting, and induced impacts of high technology 
procurement to end up in those regions with a sophisticated social and 
industrial infrastructure, regardless of efforts to redirect the 
geographic location of prime contracts. The Report also concluded that 
even if Federal procurement were an appropriate instrument for influenc¬ 
ing regional development, the nation was without a coherent national 


138 



ACDA/E-156 


policy on regional development which could provide guidelines on 
improving the spatial distribution of economic activity. 

It was therefore recommended that the nation approach the design 
of national policy on regional development by facing some unresolved 
issues, such as: 1) efficiency vs. equity in regional development; 

2) optimal balance between urban, suburban, and rural development; 3) 
growth vs. environmental quality; and 4) Federal revenue sharing vs. 
pressure upon regions to industrialize in order to support local 
government services.^ 

Finally, the Report warned against the assumption that applica¬ 
tion of advanced technology would automatically result in net benefits 
for a region, citing dangers of sonic boom from the supersonic trans¬ 
port and of unanticipated side effects from weather modification. The 
Report urged that full-scale social science evaluation of new tech¬ 
nologies be undertaken prior to widespread regional and national adop¬ 
tion of these technologies.10 

Important advancements in the estimations of regional impacts from 
changing expenditures are being made by Karen Polenske and her col¬ 
leagues in the Harvard Economic Research Project.^ These efforts 
represent an extension of Leontief's pioneering U.S. input-output 
models to account for inter-spatial economic flows. This approach does 
not result in the development of true interregional interindustry 
models, identifying regions of origin and destination but represents 
an effort to develop less expensive models which can utilize existing 

data and methods. These models have been defined as intranational 

1 2 

rather than interregional. x 


9 

Report of the Independent Study Board , pp. xi-xii. 

1 0 Ibid. , p. 41. 

■'■'TCaren R. Polenske, "Interim Report on the Multiregional Input- 
Output Research Program," Report No. 6, June, 1968, Harvard Economic 
Research Project, Prepared for the Economic Development Administration, 
U.S. Department of Commerce; "Shifts in the Regional and Industrial 
Impact of Federal Government Spending," Revision of EDA Report No. 2, 
March, 1969, processed. 

12 For detailed definitions and appraisal of other types of models, 
see Robert A. Edelstein, "Methodology of Regional and Subregional Input- 
Output Studies," Report No. 8, June, 1968, Harvard Economic Research 
Project, processed. 


139 





ACDA/E-156 


The important distinction in these models is between national 
industries for which demand and supply are balanced nationally but not 
regionally, and regional industries for which demand and supply are 
balanced regionally as well as nationally. Another important feature 
of these models is their attempt to present comparable economic data 
over a long period of time, for the years 1947, 1958, and 1963. The 
estimates are given for the 90 industry structure of the OBE National 
Model, and are disaggregated for 17 regions, which, except for three, 
are multi-state regions. National input coefficients have been ad¬ 
justed for regional differences in some industries and efforts are 
being made to improve the model by using transportation data from the 
Department of Transportation.. 

Additional efforts are also being made by the Harvard group to 
address the major problem in regional analysis, i.e., the lack of 
information on interregional flows. Models now being developed are 
designed to utilize data from the Census of Transportation, Inter¬ 
state Commerce Commission and other sources to identify major inter¬ 
regional interindustry flows of goods and services. 

Important conceptual and methodological contributions have result 
ed from the efforts of the Harvard Economic Research Project. At their 
current state of development, the intranational models being used 
present several difficulties in the analysis of the regional impact 
problem. The division of industries between national and regional is 
an arbitrary one. Also, the 17 regions used are large relative to the 
nature of the policy issues involved. In order to deal with regional 
impact problems, it is important to be able to estimate effects upon 
the individual states, SMSA*s, and counties which are the political 
units and decision-making entities involved. A regional model de¬ 
signed for this purpose will be described in the next section. 

An impressive example of the potential value of having reliable 
interindustry tables for individual regions is provided by the use of 
the Philadelphia model by Walter Isard and his colleagues to examine 
the local impact of Vietnam spending.13 In this application of the 
most detailed regional interindustry table ever compiled, Isard and 


13 

Walter Isard and Thomas W. Langford, Jr., ’’Impact of Vietnam 
War Expenditures on the Philadelphia Economy," Papers, The Regional 
Science Association , Volume Twenty-three, 1969, pp. 217-265. 


i 


140 






ACDA/E-156 


Langford analyze the direct and indirect impacts of Vietnam expendi¬ 
tures upon the Philadelphia economy in terms of 36 Federal government 
final demand sectors and 496 endogenous sectors. Their study indica¬ 
tes that direct expenditures in the Philadelphia area in support of 
the Vietnam war in Fiscal Year 1968 amounted to $284 million and 
generated additional indirect expenditures of $999 million, total¬ 
ling $1,283 million. In examining offsetting programs which might 
have been financed with resources freed by terminating the war, they 
point out that direct expenditures of $284 million might have been 
used to support a large program of low income housing as well as 
primary, secondary, and higher education. They estimate that the 
indirect impacts of this combination of programs would amount to $953 
million, with a total impact about $45 million less than that from 
Vietnam expenditures. 

In this study, Isard and Langford do not explicitly deal with the 
problem of induced expenditures. Their model is regional, rather than 
interregional, and they discuss some of the problems created by lack of 
interregional models and interregional flow data. For example, one of the 
reasons they decided to use technical input coefficients rather than 
input coefficients adjusted for regional imports is that the lack of 
interregional interindustry tables makes it impossible to deal consis¬ 
tently with changing import-export relationships between regions as the 
size and composition of expenditures changes. Despite these problems, 
the use of the Philadelphia model by Isard and his colleagues sug¬ 
gests the versatility of regional and interregional interindustry 
models. 

Regional and interregional interindustry models are valuable not 
only in the analysis of economic impacts of changing expenditures, but 
are promising techniques for analysis of impacts upon the environment 
resulting from economic activity. Accelerating concern about environ¬ 
mental deterioration at the national level has led to growing recog¬ 
nition of a positive relationship between economic growth and 
pollution.14 Since environmental change' is a spatial phenomenon, it 
is not surprising that deterioration of environmental quality led to 
early concern about this phenomenon at the regional level and led to 


"^Robert U. Ayres and Allen V. Kneese, '’Production, Consumption, 
and Expenditures," American Economic Review , Vol. LIX, No. 3 (June, 
1969), pp. 282-297. 


141 




ACDA/E-156 


efforts to extend interindustry models for analysis of the problem. 

Isard and his colleagues have been active in this area and have ex¬ 
tended the analysis into examination of economic and environmental 
impacts upon living ecologies.16 

These studies represent promising efforts to extend traditional 
regional models for the analysis not only of economic variables but 
also of other phenomena which affect the quality of life. 

IV.1.4 Dimensions of the Impacts: Some Empirical Projections 
IV.1.4.1 Projected Changes in Defense Expenditures 

Throughout this study, the estimates of economic impacts from 
changing defense expenditures, both upon the national economy and upon 
regional economies, have been based upon a common set of assumptions 
about military budget alternatives, as developed by William W. Kaufmann. 
Their details are described in the Overview and Summary chapter of 
Professor Udis. 

Each of the Kaufmann defense budgets has been estimated in terms 
of composition and magnitude to be consistent with a wide range of 
possible alternative U.S. military policies. The estimates are intended 
to be highly realistic alternatives, but their predictive value is not 
essential to their significance for this study. A major purpose of 
these estimates is to test the sensitivities of available national and 
regional economic projection models to wide variation in assumptions 
about the size and composition of defense expenditures. 

IV.1.4.2 Impacts Upon the National Economy 

IV.1.4.2.a The Almon Model 


As a first step in estimating regional economic impacts of chang¬ 
ing defense expenditures in this study, it has been necessary to begin 
with an estimate of national changes in output and employment by 
industry. The national estimates of employment change are then used as 


John H. Cumberland, "A Regional Interindustry Model for the 
Analysis of Development Objectives," Papers, The Regional Science 
Association , Vol. Seventeen, 1966, pp. 65-94. 

Walter Isard, et al. , "On the Linkage of Socio-Economic and 
Ecologic Systems," Papers, The Regional Science Associa tion. Volume 
Twenty-one, 1968, pp. 79-99. 


142 













ACDA/E-156 


inputs into a regional model, which allocates these changes geographi¬ 
cally among states, Standard Metropolitan Statistical Areas (SMSA's), 
and counties. The national projections model used is the Marvland 
Interindustry Forecasting Model of the University of Maryland Bureau 

of Business and Economic Research developed by Professor Clopper Al- 
mon. / 


The Axmon Interindustry Forecasting Model was chosen for a number 
of reasons. It is an operational, general equilibrium model, time 
phased and disaggregated to a level of approximately 100 endogenous 
industrial sectors adjusted for technological change. It includes 
structural relationships in sufficient detail to demonstrate sensitivity 
to the variations in the alternative defense budgets to be examined, 
yet takes account of the capacity of the national economy to compensate 
through consumption changes to variation in other expenditures. Also, 
the Almon model generates estimates of the usual GNP components, and 
the industry employment totals, which activate the related Harris 
regional model. 

IV,1.4.2.b Relating the Alternative Defense Assumptions to the Almon 

Model 


The first step in running the alternative Department of Defense 
budget assumptions through the Almon model was to state the alterna¬ 
tive defense budgets in terms of the industries specified in this model 
in both 1966-^° and 1972 price levels (see Table 2). This required that 
the military budgets be disaggregated into such components as military 
construction, compensation of personnel and procurement (see Table 3).^ 

Changes in the price level are based upon the assumption of 3.5 
percent increases annually between 1966 and 1970, and 4 percent total 
from 1970 to 1972, giving an 18 percent increase (without compounding) 
between 1966 and 1972. Military construction in 1972 is assumed to be 
$750 million in 1966 prices and $885 million in 1972 prices. 


1 7 

■"For a detailed description of this model, see Clopper Almon, Jr., 
The American Economy to 1975: An Interindustry Forecast (New York: 

Harper and Row, 1966). 

1 8 

Price levels for 1966 are reported because the Maryland model 
was originally computed on this basis. 

^The author is indebted to Mr. David Gilmartin of the Maryland 
Interindustry Forecasting Project for translating these defense assump¬ 
tions into industry purchase requirements and for programming special 
runs of the national forecasting model. 


143 







TABLE 2 

1972 Defense Procurement- Five Kaufmann Assumptions In 1972 Prices 


ACDA/E-156 



144 


19. Sugar 








ACDA/E-156 


w ^ 

VO C 

H • O 

W n rl 

O a\ H 

Q </>• rH 
tD ^ *H 
PQ JO 


O O O pH 

o 

00 O 

O 

m 

<* 

vO 

vO 

oo 

ON 


CM 


rH 


rH 


to 

o 

CO 

O 

rH 

00 

m 

n- 

O'* 



m 

VO 

On 

vO 

pH 

oo 

00 

m 


rH 

<r 

CO 


in 

rH 

CM 


t—I <J- 


O 

• 

vO 

CM 


Q 



















uo c3 
Eh • o 

O 

O 

o 

00 

On 

CO 

O 

CO 

rH 

CM 

00 

UO 

CO 

CO 

rH 

v£> 


CO 

W O *H 
C5 fN H 




m 

o> 

UO 



CM 

CO 

rH 

uo 

O 

UO 

r". 

CO 

CM 

• 

n* 

Q </> i-H 




vO 




On 


pH 

rH 

CO 

CO 


rH 

CM 

CM 

ON 

jo ^ *H 
PQ JO 





rH 










rH 

CO 



CJ ^ 



















vO G 
H • O 

O 

O 

o 

vO 

VO 

VO 

O 

ON 

uo 

ON 

uo 

vO 

o 

vO 

00 

CM 

vO 

ON 

W *h 

o VO rH 
Q CO- pH 
tD ^ *H 




on 

00 

U0 


CM 


CO 

CM 


CM 

uo 

CO 

CM 

CO 

• 

CM 




vO 

UO 

pH 



O 

pH 

<r 

rH 

rH 

CO 

CO 


CN 

rH 

*sT 

CO 

CM 

O 

PQ JO 


X 

G 

3 

G 

PQ 



•H 


<r 

g 

4-3 

H 

• 

o 

g 

W 

ON 

•H 

o 

O 

UO 

rH 

a 

a 

-CO¬ 

pH 


tD 

'S—'' 

•H 

CM 

PQ 


rO 


O O O CO 


vO O 

ON 

r». 

m 

CO 

O 


vO 

rH 

pH 

uo 

ON 


o 


<r 

vO 

rH 

O 

rH 

vO 


CM 

CM 

ON 

<r 

uo 

CO 


oo 

co 

*H 

rH 

CO 

CM 


O 

oo 

rH 

oo 


rH pH CM 


w 

PQ 

<3 

H 


<3 

CM 

/—N 

g 

O 

O 

O 

CO 

<r 

ON 

O 


o 

Eh 

• 

o 




<r 

UO 

rH 



vO 

W 

CM 





CM 

UO 




00 

O 

-4- 

rH 










Q 

•CO- rH 










ZD 

'—' 

•H 










PQ 


rO 






CO 












0 


1 










O 


rH 







CO 



g 


o 







4J 



G 


x 







a 



G 


a 







0 



rH 









X 



rH 









o 



0) 


x 







H 



a 


G 







Oh 



CO 


G 










•H 









03 



£ 


CO 







O 





G 







O 


G 

#N 


rH 







Pm 


H 

X 


•H 




>* 





G 

U 


4-3 




ppj 



CO 


>-• 

o 


X 




H 



0 



cj 


G 




CO 



O 


X 



H 







G 


G 

G 






Q 


CO 

G 


G 

M 


X 




$3 


g 

G 



•H CO 


rH 




M 


00 

rH 

o 

C0 

H G 

pH 

o 






g 

rH 

o 

CJ 

pH 

G 






>s 


G 

a 

•H 

p> *H 

U 

G 

>s 




X 

g 

O 

G 


CO 4-1 

G 

CO 

U 




G 

> 

CO 

rG 


00 X 

CM 

3 

G 




G 

g 

•H 

o 

G 

G G 


O 

4-1 




cj 

PQ 


H 

Pm 

P3 H 

<3 


co 




o 

rH 

CM 

CO 

<1- 

uo 

vO 

r^. 





CM 

CM 

CM 

CM 

CM 

CM 

CM 

CM 




vO 

ON 


rH 


CM 

ON 

CO 

vO 

CO 

O 


m 



CO 


pH 

rH 

CO 

On 

00 

vO 


rH 



rH 


rH 


<r 

rH 


CO 










rH 



CJ0 












G 





60 







*H 





G 







X) 





•H 







G 





X) 






4-1 

rH 





G 






G 

o 





rH 






rH 

X 





CJ 



60 


CO 

*H 

w 





X 



c 


O 

O 






w 



•H 


*H 

H 

#v 








rC 


4-3 


CO 



G 





CO 


G 

X 

4-3 



U 


CO 



♦H 


rG 

G 

CJ 


co 

G 


4-3 



rH 


4-3 

G 

G 


H 

4-1 

G 

a 


CO 

jp 


c 


X) 


G 

•H 

U 

G 


H 

G 

CO 


60 

o 


G 

G 

G 

X 


G 

Oh 

rH 

CO 

G 

u 


•H 

G 

4-3 

O 


G 


G 


•H 

Q-t 


G 

G 

•H 

M 


•H 

X 

O 

X 

G 



4-> 

Pm 

G 

Oh 


G 

G 

•H 

c 

G 

X 

CO 

c 


M 


CO 

4-> 

G 

p 

G 

G 

G 

H 

o 

X) 

G 

X) 

Jm 

G 


G 


pH 

G 

G 

CJ 

rH 

pH 

G 

G 

O 

60 

JS 

C0 

CJ 


G 


o 


G 

G 

U 

C 

CJ 

O 


V-i 

•H 

G 

rC 

G 


•H 


•H 


•H 

#s 

G 

G 

G 

G 

O 

H 

G 

H 

4-3 

a 

4-3 

CO CO 

rO 

4-3 

X) 

CO 

•H 

G 

4-3 

G 

G 

•H 

CO 

60 g 


G 

o 

G 

4-4 

CM 

c 

a 

•H 

w 

G 

G G 


O 

o 

o 

4-3 

G 

o 

G 

J-4 

G 

rH 

J-4 4-3 

►j 

CJ 


33 

O 

CM 

CJ 

CM 

Pm 

PQ 

CM 

Q M 

CO 


ON 

o 

rH 

CM 


CO 


uo 

vO 


CM 


CM 

CO 

CO 

CO 


CO 

CO 

CO 

CO 

co 


145 










ACDA/E-156 


w ^ 

VJD 3 

sD 

sO 

lA 

*4- 

O Os 

rH 

sO 

r^. 

o 

r» 

sO 

• 

04 

• 

r~- 

• 

o 

• 

• 

CO 

• 

• 

H • O 
W n rl 
O Os 3 
Q </> 3 

59. 

• 

r". 

CM 

3 

• 

00 

sO 

3 

• 

CO 

• • 

rH 

rH 

• 

00 

CM 

OH 

CO 

O'* 

rH 

• 

rH 

00 

r^. 

rH 

rH 

00 

CO 

rH 

330 

35 

v> 

Co 

SO 

o 

CO 

CM 

CO 

117 

^ w *H 
PQ 45 


CM 

















Q O 

uo a 
H • o 

O 

<r 

CM 

sO 

O 04 

CM 

CM 

W O *H 

• 

• 

• 

• 

• • 

* 

• 

O rH 

SO 

<r 

O 

CM 

OS 

sO 


O </> 

JD v *H 
CQ X 

<r 

r- 

m 

rH 

CO 

rH 



O'. 

rH 

co 

rH 


rH 

CM 

rH 

m 

04 

s0 

r^. 

A. 

O 

oo 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

CO 

CO 

CO 

o 

m 

O'. 

00 

sO 

in 

o 

vO 

rH 

sO 

rH 

in 

CM 


CO 

04 

Os 





04 



CM 




o ^ 


H 

so d 
• o 

n. 

sO 

r- 


W 

O'. 3 

• 

• 

• 

* 


SO rH 

00 

CM 

r^- 

CO 

§ 

</> rH 

o 


O 

sO 

rH 

CO 

rH 



A. 

<* 

OS 

00 

Os 

oo 

rH 

Os 

04 

m 

<r 


O 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

Os 

sO 

3 

sO 

CO 

sO 

rH 

Os 

Os 

rH 

o 

sO 

sO 


00 


sO 

rH 

sO 

rH 

sO 

CM 

m 

m 

CM 

OS 


rH 

rH 





CM 



CM 




3 

Q) 

3 

a 


3 

d 

o 

a 


CM 


P5 


rH 

00 

m 

CO 

H 

• o 






OS -r 

O 

OS 

co 

04 

8 

S 

in rH 
</> rH 
w ^ 

45 


o 

CO 

rH 

rH 

rH 



O 


o 

o 

m 

O 

CM 

00 

CO 

O'. 

m 

rH 

m 

os 


m 

rH 

m 

rH 

m 



3 fH 


m 

rH 



00 

rH 

CM 

<r 

CM 

sO 

rH 

as 

CM 

CM 

CM 

<r 

O 

CM 

CM 

O'. 


W 

05 

c 

H 


< 


>-vJ 















CM 




CM 



CM 

d 

O 


3 

o 


O 


rH 

sO 

CO 

Os 

co 

OS 

CO 


o 

m 

m 

H 

• 

o 

• 

• 

* 

• 


• 

• 

• 

• 

• 

• 

• 

• 

• 

• 


• 

• 

• 

• 

w 

o 

CM 

•H 

O'. 

m 

00 

rH 



CO 

m 

Os 

CO 

Mf 

co 

co 


o 

CO 

r-. 

OS 

CO 


rH 

rH 

in 






sO 


CM 


CM 


Os 

3 


rH 

00 


CO 

a 

<fy rH 


in 



















x 


•H 





















P3 






















03 

















rH 






d 

















d 





3 

d 






03 











u 





d 

•H 






3 











3 


•s 



d 

45 




CO 


a 











4J 


03 



0 

a 




3 


3 




03 





03 


a 

<U 

0) 



CP 

d 




O 


3 




4-1 

03 




rH 


3 

d 

> 



•H 

S 




3 


O 


d 


O 

3 




d 


u 

•H 

3 



3 





•3 


u 


x: 


3 

O 




u 


u 

45 

d 



a* 

00 




O 


Pm 


3 


3 

3 




<0 


cn 

O 

> 


03 

w 

d 




Pi 




d 


C 

3 




X 



d 



d 


3 




Dm 

00 

a 


d 


U 

O 







X 

#s 


d 

3 

d 





d 

•H 


hJ 


Cu 

u 




co 


00 


00 


•H 

d 

•H 




3 

•rH 

3 





Pm 




3 

CO 

d 

Z 

d 


45 

d 




>-« 

<1) 

a 

0) 

00 

u 


CO 





O 

Pi 

•H 

d 

•H 


3 






3 

•H 

d 

d 

d 


CO 

>s 

rH 



H 

0) 

X> 03 

H 

3 


3 

>> 




H 

rH 

IM 

rH 

•H 

XJ 


d 

d 

a) 



U 

d 

6 4J 

a 

d 

03 

EH 

M 




co 

rH 

a) 

Pm 

d 

4J 


rH 

rH 

d 



Q) 

•H 

3 O 

cn 

3 

3 


d 

d 



d> 

<: 

M 


d 

o 


cj 

CJ 

3 



Pm 

d 

3 3 


Pm 

O 

3 

a 

o 





s 

3 

d 





cn 



! 

4-f 

a, xj 

r. 


3 

d 

•H 

•H 



53 

3 

d 

H 

3 


3 

3 




d 

d 

o 

co 

#s 

3 

d 

45 

3 



3 

d 

3 

d 


d 

cn 

d 

d 

3 


g 

o 

o 

* Vm 

00 03 

(U 

O 


o 

o 


. 


d 

0) 


u 

d 

4-1 

d 

d 

d 


3 

X 

CJ 

OO Pm 

d 3 

3 

Pi 

03 

d 

3 





rH 

M 

d 


a 



d 

u 

d 



d 

•H O 

d 

Pm 

d 

X 

Pi 




3 

O 

<0 

x: 

0) 

3 

co 

d 


<u 

•H 

u 

rH 

•H 3 

CL 3 



c 


3 




d 

1M 

XI 

3 

d 

3 

co 

d 

d 

a 

0 

<u 

d 

u d 

0 3 

3 

d 

•H 

6 

CO 




•rH 

3 

x> 

d 

o 

O 

d 

o 

o 

a 

3 

xs 


d h 

d o 

Pi 

3 

00 

P4 

d 




d 

<u 

3 

CJ 

X 

Pi 

rH 

4-1 

u 

o 

H 

u 

<D 

<U 03 

3 Pi 

d 

•H 

d 

d 

o 




Pm 

Pm 

Pd 

3 

C/3 

Pm 

O 

cn 

HH 

CJ 


o 

X 

33 S 

cn Pm 

X 

£5 

X 

Pm 

o 




CO 

os 

o 

rH 

CM 


CO 

<r 

m 

so 


oo 

Os 

d 

3 

CM 


co 


• 

m 




CO 

CO 

<r 




<r 

<r 




"t 


m 

m 

m 


m 

m 

m 


146 







TABLE 2 (continued) 

BUDGET A BUDGET B BUDGET C BUDGET D BUDGET E 
($42.2 ($59.4 ($67.6 ($70.5 ($93.6 

_ INDUSTRY ___ billion) billion) billion) billion) billion) 

56. Material Handling Equipment 28.7 67.7 82.1 77.6 100.4 


ACDA/E-156 


<r 

m 


00 

ON 

CN 

rH 

CM 

m 

ON 

Csl 

oo 

CO 

ON 

ON 

CO 

00 


nO 


CM 

rH 

rH 

CM 


CM 


m 

rH 

00 



vO 

00 

00 

O 

00 


ON 

m 

nO 

o 

CO 

CO 

CO 

si* 

CM 

CO 


ON 

CO 


CM 

03 

rH 

ON 



00 

rH 

00 

00 

O 

00 


ON 









00 

00 

nO 

00 

rH 

rH 

<r 

• 

• 

• 

• 

• 

• 

. 

• 

00 

o 


v£> 

ON 

CM 

ON 

CM 

ON 

MJ- 

o 

m 

nO 

ON 

m 

CM 

rH 


CM 


CM 


m 



m 

rH 

00 

00 

o 


nO 

nO 

r^. 

CO 

ON 

ON 

o 


00 

CO 

<r 


rH 

m 

nO 

ON 

CM 

CM 

rH 


CM 


rH 


m 



in 

CM 

CO 

VO 

CO 

vO 

in 


O m rH O' O CT> 

rH co oo <rooo<Nt-i 

rH rH rH 


CM 

rH 

CM 

m 

nO 

CM 

NO 

ON 

• 

. 

• 

• 

• 

• 

• 

• 

ON 

r*>. 

m 

o 

NO 


CO 

o 

m 

CM 

o 

rH 

CO 

CM 

00 

CM 


00 

m 

rH 

NO 

r>. 

NO 

NO 


m 




ON 

CM 



NO 

CO 

o 

ON 

CO 

rH 

CO 

O 

CM 

NO 

ON 

NO 

CO 

CO 

CM 


NO 

ON 

o 

rH 


rH 

NO 

ON 


m 

<r 

rH 

NO 



m 


<r 




00 

CM 



NO 

r". 

ON 

CO 

o 

CM 

ON 

m 

rH 

o 

<r 

NO 

m 

00 

CM 

00 

m 

rH 

rH 

ON 

m 

o 

NO 



m 

CO 


in 

ON 

ON 



CO 




NO 

rH 



00 

rH 

00 

ON 

m 

o 

o 

CO 

On 

in 

m 

00 

CO 

o 

CO 

ON 

NO 

m 

NO 

o 

NO 


o 

oo 

rH 

00 

CO 

o 

m 

ON 

CM 

CM 

-d- 

rH 

r-* 

CM 


CO 

00 


CM 

00 

co 

<1- 

CO 

CM 

CO 

o 







rH 



<r 

rH 


CM 

ON 

00 

CM 










rH 




CM 










03 


03 



















0) 


G 


00 













03 

0) 

i 


c 


4~> 


G 




03 




X) 



XJ 


03 

a) 

cd 


•H 


cd 


♦H 




G 




G 



G 


G 

G 

rH 



03 

u 


U 




•H 




cd 



cd 


•H 

•rH 

rH 


a 

0) 

cd 


•H 




00 








JZ 

JZ 

03 


<2 

C 

CL 


3 


4-> 


G 




03 





u 

u 

o 


X 

iH 

a 




G 


W 




3-1 


03 

u 


cd 

cd 

03 



-c 

<3 


X) 


03 

03 





03 



a) 


£ 

X 

•H 


00 

o 


03 

G 


0 

4-J 

XJ 

4-> 



rH 


u 

c 




£ 


G 

cd 

T3 

03 

cd 


cl 

G 

G 

G 



•H 


o 

•H 


rH 

rH 



•H 

£ 

C 

O 



•H 

0) 

cd 

o> 


03 

cd 


rH 

JZ 


cd 

cd 

X) 


4-» 


cd 

G 

00 


G 

G 


0 


4-1 

3-i 


CJ 

o 


♦rl 

•H 

G 


G 

>N 


cd 

G 


cr 

O 

>> 

CL 


Cl 

H 



cd 


U 

u 

cd 


a 

L 

03 

•H 

•H 


W 

CL 

cd 

•H 


cd 



XJ 

X 


u 

u 


03 

0 

4-J 

Ci 

rH 

4-1 



0 

od 

G 

03 

Cl. 

n 


G 



0) 

03 

03 

a) 

O 

03 

O 

CL 

4= 


G 

O 

i 

cr 

03 


03 


cd 

00 


0 

G 

a 

G 

CJ 

G 

4-1 


00 


O 

C_3 

X 

W 

rH 

XJ 

C 



a 


XJ 

X> 

o 

•H 


X) 

o 

<3 

*H 


•H 




a 

G 

*H 


03 

•H 


G 

G 

rC 

JZ 

X> 

G 

X 


r-J 


4-J 

CJ 

CN 

rH 

•H 

cd 

cd 


4-J 



M 

HH 

C/3 

a 

G 

M 


x> 


4-> 

cd 

•H 

03 

cd 

42 


Ci 


G 

u 

g 




cd 

cd 


a 

rH 

CJ 

G 

a 

G 

03 

o 

03 

4-1 

H 


03 

o 

0) 

rH 

rH 

03 

£ 


0) 

•rH 

o 

•H 

03 

•H 

O 

•H 

•H 

> 

M-l 



£3 

s 

& 

cd 

cd 

c 


03 

a 

3-1 

X 


0 

G 

Ci 

3-4 

3-4 


cd 

#N 

03 

3 

rH 

Pu 

•H 

j-i 

•H 

03 

o 

•H 

4J 

03 

4-J 

a 

G 

4J 

03 

4-1 

Ci 

3-1 

03 

03 

3-1 

cd 

•H 

o 

03 

-G 

G 

•H 

> 

O 

03 

CJ 

•H 

s 

CJ 

4-J 

CJ 

O 

U 

CL 

rH 

4-J 

4-1 

0 

a3 

G 

o 

O 

iw 


03 

G 

03 

G 

§ 

03 

4-J 

03 

4-» 

Ci 

•H 

o 

03 

a) 

cr 

CL 

0) 

cd 

<v 

IM 

<13 

rH 

O 

rH 

o* 

O 

rH 

cd 

rH 

O 

•rH 

42 

>n 

G 

£ 

W 

C/3 

o 

w—1 

G 

O 

C/3 

W 

£ 

w 

w 

O 

w 

PQ 

w 

£ 

<1 

CO 

a 

M 

• 


00 

ON 

O 


rH 

CM 

CO 

<r 

m 


NO 

r- 

C30 


ON 

O 

rH 


CM 

in 


m 

m 

NO 


NO 

NO 

NO 

NO 

NO 


NO 

NO 

NO 


NO 


0- 




147 









ACDA/E-156 


w 


p 

o 


vD 
H • 

W fO *rl 

a ^ h 

a <s> r-\ 

ZD *H 
PQ rO 


o 

• 

CO 

vO 

< 3 - 


O 

• 

Mf 

CO 


vO 

cr> o 

as 


00 

o 

CO 


00 

00 

00 

CO 

. 

(S 

• • 

o 

• 

00 

. 

rH 

• 

CM 

• 

as 

• 

in 

• 

CO 

• 

CM 

• 

00 

• 

CO 

• 

rH 


H 

00 

o 

uo 

00 

rH 


rH 

CO 

CM 

vO 

CM 

vD 

rH 

Mf 


CO 


CM 

CM 

m 



CO 





rH 




rH 




<r o 



Q 

in p 

r>- 

CO 

as 

m 

o o 


00 

CM 

00 

rH 


O 

H 

• o 

• 

• 

• 

• 

• • 

• 

• 

• 

• 

. 

• 

• 

W 

O *H 

r^. 

vO 

as 

CM 

vO 

o 

o 

CO 

rH 

00 

mT 

as 


fH 

m 

CM 

CO 

o 


rH 

*3- 

fx. 

rH 

00 

vO 

00 

OQ 

</> rH 

CO 

-a- 

CM 


rH 

CO 


o 

rH 


rH 

rH 

rH 

rH 



ro 

<r 


<f o 


o 

o> 

00 


p 

o 


°vO 

H • 

W 

O vO *H 

g </> rH 

GQ 



oo 

as 

rH O 


CO 

rH 

CM 

m 

Os 

as 

SO 

m 

rH 

oo o 

00 


r>. 

CO 

<* 

00 

CO 

in 

CM 

00 

CO 


as 

O 

rH 

r**. 

cm 

rH 

VO 

in 

CM 

Mf 

CO 

rH 

Os 

f"* 

m 

rH 

m 


CO 

m 

CO 

rH 

CO 


rH 


rH 

rH 

CM 



CT» 


CM 





rH 




rH 





TO 

P 

a 


p 

o 

a 


CM 

w 

« 

< 

H 


PQ /-n 

a 

H O 

W • *H 


s 


Ch r— 
LO r™ 


to </> *H 

«^,D 


CM P 
H • O 
W CM *H 
O *3- rH 
Q </> rH 
t0 w >H 
PQ X> 



o>!cocMOcovoinr--coo co vo rH co coo 


• 

rH 

CM 

<r 

00 


o 

m 

in 

o 

Mf 

CO 

VO 

VO 

rH 

vO 

rH 

CM 

vO 

00 

CM 

r^- 

CO 

co 

rH 

lO 

st 

CO 

rH 

Mf 


CO 


o 

CM 

rH 

CM 


Os 


rH 

rH 

O 



r>» 



CM 









rH 





CM 


CO 

CM o 

O 


rH 

r-. 

-d- 

m 

00 

m 

00 

uo 

rH O 

• 

cs| 

Os 

m 

CM 

<* 

<r 

m 

sO 


Os 

o 

as 

vO 


as 

CO 



CM 

m 

rH 

rH 

as 


O 

VO 

CO 


rH 

CM 

rH 


00 

rH 


rH 


CO 




Mf 



CO 




















i 


CO 



















*H 


P 



















4-4 


CO 














V4 





P 


•H 



T3 








a) 



•H 



CO 


P 





P 








Tl 



P 



p 

p 

M 


cx 

o 


U 








cd 



CX 



CJ 

o 



H 

•H 


0 








u 



CD 



> 

•H 

rH 


P 

jp 


4J 




00 




H 


rH 

04 



•H 

4-1 

P 


4-4 

CX 


o 




p 



CO 


a> 

cd 




H 

P 

P 


P 

P 


cd 




*H 



<D 

rH 

a 

4-1 

03 



P 

P 

O 


w 

u 


MM 




4-1 



O 

•H 

p 

P 

P 



C/5 

u 

•H 



00 


P 




CO 

CO 


•H 

cd 

cd 

CD 

P 




CJ 

4-1 


4-1 

o 


p 




cd 

<D 


> 

4-1 

H 

04 



w 

M 

P 

P 


P 

u 


cd 




o 

•H 



CD 

P 


rH 


p 

•H 

04 

O 


P 

o 


a 




03 

4-1 


a> 

04 

CO 

Xi 

P 


a 

P 


P 


6 

£. 



a 


p 

•H 


cn 


p 

p 

P 


•H 

a 

03 

03 


P 

Oh 


w 


o 

P 

o 

rH 

CO 


TJ 

M 

«d 

O 


> 

p 

P 

W 


H 



p 


•H 

O 

u 

•H 

a> 

M 

P 



CO 


U 

04 

P 



P 

’a 


o 


4-» 

•H 

PQ 

4-4 

•H 

a) 

cd 

03 

CD 



P 



03 


> 

p 


CD 


cd 

4 -> 


P> 

4-1 



P 

4-4 

CD 


w 

p 

CO 

P 


O 

P 

u 

p 


4-1 

cd 

> 


*H 

<D 

CD 

cd 

P 

0-i 



rH 

4-4 

P 


O 


p 

cd 

CO 

H 

o 

H 

o 

rH 

CO 

rH 


4-1 


CO 

w 

•H 

P 




rH 

0 ) 

rH 

•u 

O 

•H 


•H 

•H 


P 

(D 

CO 

* 

cd 

CO 

O 

P 

rH 

CO 

rH 

cd 

e 

rH 

o 

CX 

p 

•V 

U 

4-4 


CO 

o 

W 

CO 

o 

p 

O 

8 

P 

P 

p 

u 

Ou 

(D 

p 

CO 

p 

o 

4-1 

P 

M 

CD 

p 


rH 


p 

6 

p 

CJ 

o 

u 

•H 

*H 

a 

03 

a 

0 

•H 

a 


<U 

rH 

cd 

rH 

CD 

> 

•H 

o 

CO 

•H 

•H 

p 

4-4 

P 

CO 

o 

cd 

0 


CD 

CO 

4-4 

O 

P 

cd 

4-4 


CO 

4-4 

p 

03 

4-4 

03 

cx 

cr 

•H 

u 

u 

o 

*5 

rH 

cd 

Cd 

eP 

•H 


O 

P 

p 

p 

a 

P 

P 

P 

o 

w 

s 

PH 

H 

o 

04 

w 

o 

3 : 

3 


04 

Pd 

cn 

PQ 

< 

<! 

s 

4-1 

PH 



O 




o 


co <r m vo‘ r^oo<T»o«HcMcovt m vo oo as 

r- r^-r^r^-r^r^oooooooooo oooooooo oo 


148 


90. State and Local Government 
Enterprises 








TABLE 2 (continued) 

BUDGET A BUDGET B BUDGET C BUDGET D BUDGET E 
($42.2 ($59.4 ($67.6 ($70.5 ($93.6 

INDUSTRY _ billion) billion) billion) billion) billion) 


ACDA/E-156 


o 

m 

o 

00 

CM 

• 

• 

• 

• 

• 


00 


m 




CO 

cm 

vO 




rH 

m 




VO 





m 

<r 

o 

vD 

CO 

>3- 

o 

• 

• 

• 

• 

• 


vO 

vO 

vO 

o 



OH 

co 

00 





on 




r>. 

rH 




CO 

CO 

o 

O 

00 

o 

o 

• 

• 

• 

• 

• 


r- 

r>. 

vO 

CM 



CM 

CO 

cM 




00 

in 




*3* 

co 




CO 

Cvl 

4 

o 

r». 

on 

00 

o 

• 

• 

• 

• 

• 


m 

CM 

CO 

rH 



CM 

rH 





00 

in 




n- 

CO 




CM 

CM 


co 

u 

cd 


o 

CN] 

on 


4-1 

o . 

oo 

CD rH 

C • 
O rH 


o 


*3- 


ON 

O 

• 


• 

• 

• 

• 



CM 

ON 

CM 

>3 





ON 

ON 





f"* 

ON 





rH 

ON 





rH 



1 

cs 






•rH 






cd 






u 






u 






a> 




X 


4-1 






a 



CO 

CO 


w 



a) 

V 





o 

o 


'O 



•H 

•H 


cs 



J-4 

M 


cd 



CL 

CL 


rH 


CO 

CM 

vO 


(V 

CO 

0) 

r>* 

vO 


> 

4J 

•H 

ON 

ON 


cd 

4-4 

rH 

rH 

rH 


u 

*H 

CL 




H 

O 

O. 

c 

a 




d 

hH 

HH 


CO 

'O 

C/3 

V-/ 

V-/ 

CD 

CO 

c 




4-1 

0) 

cd 

0) 

C/3 

C/3 

M 

a 


o 

d 

d 

o 

•H 

4-> 

•rH 

<3 

< 

CL 

CO 

cs 

4H 

H 

H 

B 

0 

0) 

4-4 

O 

O 

M 

PQ 

0 

O 

H 

H 

• 

• 


• 



rH 

CM 


CO 



on 

ON 


ON 




X >N 
rH JD 


c 

•H 


T3 

a) 

T3 


Q) 

V-i 

cd 



CO 

CO 

0) 

O 

O 

>-4 

•H 

d 


00 

CL 

•H 


4H 

CM 



4-» 

ON 

C 

rH 

CL) 


0 

rH 

<1) 

cd 

U 

d 

d 

u 4 

o 

(U 

o 



CO 

CL 

0) 


a 


•H 


u 

4-1 

CL 

CO 


d 

vO 

•o 

VO 

cs 

ON 

M 

rH 


cd xi 


149 





ACDA/E-156 


TABLE 3 


Alternative 1972 
(millions 

Budget A ($42.2 billion) 
Procurement 
Compensation 
Construction 
Total 

Budget B ($59.4 billion) 
Procurement 
Compensation 
Construction 
Total 

Budget C ($67.6 billion) 
Procurement 
Compensation 
Construction 
Total 

Budget D ($70.5 billion) 
Procurement 
Compensation 
Construction 
Total 

Budget E ($93.6 billion) 
Procurement 
Compensation 
Construction 
Total 

SOURCES: See following page. 


Budget Components 
of dollars) 

1972 Prices 

$ 11,793 
29,522 
885 
42,200 

27,814 

30,701 

885 

59,400 

34,836 

31.878 
885 

67.599 

37,736 

31.879 
885 

70,500 

56,125 

36,590 

885 

93.600 


150 







ACDA/E-156 


Department of Defense Estimated Employment by Budget 

(Thousands) 

Budget A Budget B Budget C Budget D Budget E 
($42.2 ($59.4 ($67.6 ($70.5 ($93.6 

—billion)_ billion) billionl billion) billion) 

Civilian 1212.4 1212.4 1212.4 1212.4 1212.4 

Military 2300.0 2500.0 2700.0 2700.0 3500.0 

Derivations of Defense Budget Components in Table 3 


Procurement - Table 2, Column Totals 

Compensation - The sum of 

Uniformed personnel: estimated employment times 
average annual payment $5889. 

Civilian defense workers: estimated employment 
times average annual payment $9285. 

Pay raise $4.72 billion 

£ 

Construction - Assumed to be $885 million. 


SL 

It should be noted that dividing the total military budget into only 
three categories is a convenience which oversimplifies reality. Given 
the computational formulae followed, the category labeled "procurement" 
becomes a residual which encompasses such major items as operation and 
maintenance, and research, development, test and evaluation as well as 
the procurement of new military hardware. 

^Average compensation was calculated in 1966 prices, based on compen¬ 
sations in that year, and then inflated by 18%. 

c The Construction figure for 1968 was converted to 1966 prices and 
allowed to grow at a rate of 1% per year until 1972 to reflect real 
growth in military construction. The result was inflated by 18% to 
yield the 1972 estimated construction figure in 1972 prices. A clerical 
error was discovered which would raise the value of construction some¬ 
what and thus lower the value of procurement. This would cause a maxi¬ 
mum error in any defense budget of .011%. 

Continued... 


151 





ACDA/E-156 


SOURCES: United States Department of Commerce, Bureau of the Census, 
Defense Indicators Series ES4, No. 68-3 (August 1968), pp. 34-35; 
Business and Defense Services Administration, Construction Review , 
Vol. 16, No. 2 (February, 1970), p. 22, Table A-2; Office of Business 
Economics, Survey of Current Business , Vol. 50, No. 7 (July, 1970), 
p. 35, Table 3.11. 














152 







ACDA/E-156 


The estimates for compensation include military and civilian DOD 
employees, with retirement pay and a pay increase. Military construc¬ 
tion levels and DOD civilian employment levels were held constant but 
military employment varied with each budget. Subtracting compensa¬ 
tion and military construction from the deflated Kaufmann totals 
left a residual which was assumed to represent essentially, military 
procurement. A key to the classification and definition of the 93 
producing industries is given in Table 4. 

These five estimates of defense expenditures are treated as 
exogenous, independent final demand variables in the Almon model. They 
are added to the other final demand variables—government non-defense 
procurement, foreign trade, consumption, and investment—in order to 
provide estimates of total final demand for domestic production under 
each of the five defense budget assumptions. 

IV.1.4.2.c The National Interindustry Projections 

Insertion of these final demand estimates into the model generates 
for each calendar year from 1966 through 1972 estimates of GNP and its 
components, output and employment by industry, total labor force, and 
the unemployment rate, for each defense assumption (in billions of 1972 
dollars).The compensated runs assume that as defense expenditures 
fall, civilian consumption will increase sufficiently to keep the unem¬ 
ployment rate at the full employment level of approximately 3.7 percent. 
In the uncompensated runs, unemployment is permitted to seek its own 
level. For each run of the model using the five different Kaufmann 
assumptions, the economy is assumed to begin with the 1968 level of ex¬ 
penditures and converge towards the appropriate Kaufmann defense assump¬ 
tion by 1972. For each defense assumption Lexcept Budget E ($93.6)] the 
compensated version results in higher consumption, GNP, and employ¬ 
ment, but lower unemployment than does the uncompensated version. Under 
the extreme Budget E ($93.6) assumption of very high defense expendi¬ 
tures, the uncompensated unemployment estimate falls to a level of 1.1 
percent, which would create a highly inflationary environment. There¬ 
fore, under this assumption, the compensated version assumes an anti- 
inflationary program which reduces consumption by monetary, fiscal, and 
other policies, to bring unemployment back to a more realistic level of 


20 

The Budget D ($70.5) model was used to approximate a "normalcy" 
defense budget. Hence it appears in later tables in only the uncompen¬ 
sated form. 


153 




Almon Interindustry Classification Producing Sectors 


ACDA/E-156 






CO 












X 




CO 





CO 



a> 




X 





cu 



G 




<U 





r—1 



X 




G 





X 



cd 




•H 





X 



x 




cd 





X 



c 




4-J 





CU 


to 

o 




g 





H 


X 

CJ 




o 







a) 





cj 





CO 


X 

00 









3 


CO 

c 




00 





o 


r—1 





g 





0) 


O 

73 




•H 





c 


X 

G 









cd 


Ou X 




p 





1—1 


£> 

O 




rH 





i-H 



X 




u 


00 



0) 


73 

w 




X 


G 



o 


G 





w 


•H 



CO 


cd 







43 



X 



CO 


CU 




CO 



£ 


CO 

4-> 


X 


CO 


•H 





CU 

a 

CO 

3 


4-1 


rH 


c 



X 

G 

x 

X 

cu 

o 

CO 

X 


x 

73 


*H 

73 

cu 

X 

Cl 

3 

x 

G 

CO 

g 

x 


X 

O 

C! 

g 

p 

73 

CU 

pH 

rH 

>* 

o 


X 

X 

X 

Cl 

4-J 

o 

c 


cd 


cj 


0) 

CU 

cd 

G 

•H 

x 

•rH 

73 

o 

73 



H 


X 

Ch 

G 

CH 

cd 

G 

•H 

c 

a) 

» 


73 

c 


x 


4-1 

Cd 

g 

G 

x 


73 

G 

o 

73 

p 

73 

G 


cu 


X 


r—1 

cd 

cj 

r-H 

Ch 

g 

o 

oo x 

CO 

H 

r—1 

O 



o 


cd 

cj 

c 

cj 

o 


CU 

X 

X 

c 

X 

<U 



•H 



•s 

X 

Q> 

cu 

0) 

(U 

a 

X 

X 

4-1 

o 

X 

CO 

cd 

CO 

X 

73 

CO 

•H 

<u 

cu 

G 

X 

43 

00 

Cu 


g 

o 

p 

X 

cu 

cu 

•rH 

CO 

cd 

G 

CU 

o 


o 

o 

<X 

cd 

cd 

X 

cd 

PH 

Cd 

< 

33 


HP 

33 

o 

CH 

CH 

CH 

PQ 

<r 

in 

VO 

i"» 

oo 

as 

o 

i-H 

CN 

CO 


m 

CN 

CN 

CNJ 

CNJ 

CNJ 

CN 

co 

CO 

CO 

CO 

CO 

CO 



CO 





CO 






g 





4-> 






<u 





CJ 






4-1 





G 






M 





73 









CO 


O 






4-J 



4-J 


Hi 






CU 

CO 


a 


CH 






rH 

4-J 


G 



CO 




CO 

•H 

O 


73 


Hi 

4-J 

CO 



o 

O 

G 


O 


<U 

o 

X 



*H 

X 

73 


Hi 


X 

G 

cj 



4-J 


O 


CH 


4-J 

73 

G 



CU 

73 

X 




G 

O 

73 



X 

C 

CH 

00 

CJ 


CU 

X 

O 



4-1 

cd 


G 

•H 


XI 

CH 

X 



G 


73 

X 

4-1 




CH 



So 

oo 

CU 

c 

CO 

00 

X 

CO 




CO 

G 

•H 

X 

G 

G 

CU 

CO 

to rH 



•H 

rH 

MH 

rH 

•H 

X 

G 

G 

cu 


73 

c 

rH 

CU 

CH 

G 

4-J 

rH 

rH 

cu 


G 

cd 

<J 

cd 


C 

o 

CJ 

CJ 

X 


cd 

cu 



73 

G 




CO 



rH 

73 

g 

G 

H 

73 

73 

73 



CO 

CJ 

G 

G 

G 


G 

G 

G 

73 


CJ 


G 

<u 


Hi 

G 

G 

G 

G 


•H 

* 


rH 

Hi 

CU 




G 

X 

4-J 

CO 

4-J 

o 

<U 

X 

CO 

C0 

CU 


a) 

CO 

00 

G 

X 

X 

4-1 

<u 

CO 

G 

G 

cu 

cd 

G 

X 

4-J 

X 

G 

o 

G 

O 

O 

cu 

rH 

X 

G 

0) 

p 

<U 

X 

rH 

X 

X 

o 

CH 

Q 

CU, 

CH 

cd 

XI 

CO 

O 

CO 

M 

o 

vO 

r^- 

00 

ON 

o 

rH 

CN 

CO 


m 

VO 

CO 

CO 

CO 

CO 


<r 

<r 


<r 

<r 

<r 


CO 

x 

a 

P 

73 

O G 




X 









o 



CH 









X 




CO 








X 



>Y 

CU 








CJ 



X 

u 








G 



cu 

•H 


00 






X 



X 

> 


c 






X 



CO 

X 


•H 


00 




CO 



•H 

<u 

00 

G 


c 

00 

00 


G 



Ch 

CO 

G 

•H 


♦H 

G 

G 


O 





•H 

£ 


c 

•H 

•H 


CJ 



73 

X 

G 



♦H 

G 

G 

G 




G 

G 

•H 

CO 

00 

£ 

X 

X 

o 

CU 



G 

X 

£ 

G 

G 


£ 

£ 

X 

<J 

X 



G 


o 

♦H 

g 



X 

G 

a 


to X 

<u 

X 

G 

G 

CO 

X 

a 

G 

o 


X 

X 

X 

X 

•H 

cu 

X 

G 

G 

G 

X 


X 

G 

o 

(U 

—1 
rH 

X 

G 

CJ 

X 

CU 

CO 

CO 

CO 

a 


(X 


o 

X 

X 

X 

X 

(U 

cu 

0) 

•H 

c 

1 

X 

X 

cu 

g 

CO 

G 

> 

o 

X 

X 

o 

G 

G 

X 

G 

<U 

G 

X 

•H 

X 

o 

00 

X 

o 

o 

cu 

X 

43 

O 

G 

X 

CJ 

[X 

<1 

X 

£ 

CJ 

CH 

£ 

CJ 

CJ 

£ 

X 

CN 

CO 


m 

VO 

f"- 

00 

ON 

o 

X 

CN 










X 

X 

X 


CO 


CJ 

g 





CO 






73 





73 






O 





O 






X 





O 






CH 





Ch 

CO 











X 





73 





G 

a 





O 





<U 

G 





o 





N 

73 

CO 




Ch 




CO 

O 

o 

X 








X 

X 

X 

CJ 




CO 



00 

o 

PH 

CH 

G 




G 



G 

G 



73 




O 



X 

73 

73 

X 

O 




<u 



4d 

O 

G 

X 

X 



CO 

G 


CU 

a 

X 

G 

•H 

CH 



(U 

G 


CJ 

G 

CH 


£ 




00 X 

O 

G 

CH 


73 


to 



G 

X 

CJ 

G 



<U 

G 

X 

X 

to 

X 

cU 

a 

G 

X 

G 

X 

cu 

G 

73 

CU 

CJ 

G 

73 

G 

X 

G 

G 

4d 

00 

C 

> 

CO 

X 

X 

CU 

G 

G 

X 

G 

G 

G 

cu 

X 

o 

O 

£ 

Q 

CJ 

CJ 

PQ 

CO 

CJ 

PQ 

£ 

H 

CO 


in 

vO 


00 

as 

O 

X 

CN 

CO 

X 

X 

X 

X 

X 

X 

X 

CN 

CN 

CN 

CN 


154 


ACDA/E-156 







CO 








CO 


4-) 

44 








04 


d 

a 








i—l 


04 

3 








cj 


0 

XI 








X 


CL. 

o 








CJ 


•«H 

u 










0 

CM 










cr 









C 


E 

X 








CO 



a; 










a 

V-i 








CO 


•H 

3 








M 

CO 

rfi 

44 



00 





<u 

E 

CM 

o 



d 





X 

CJ 

cO 

cO 



X 





♦H 

o 

Ml 

4H 



44 




CO 

cO 

rH 

00 

3 



CO 

co 



X 

u 

CJ 

o 

C 



CO 

04 



X 

H 


4-4 

jo 



CJ 

•H 



CO 


T3 

o 

s 



X 

X 



Pi 


d 

rd 


d 


co 

X 




CO 

cO 

E 

CO 

o 

d 

o 

X 

CO 


-o 

d 



3 

X 

o 

M 

X 

04 


d 

X 

CO 

T3 

O 

44 

X 

PQ 

X 

X 


cd 

CO 

X 

d 

04 

cO 

44 


E 

X 



Mi 

CJ 

cO 

d 

44 

CO 

> 


•rH 


X 

H 

<D 


co 

u 

a 

H 

o 

.—1 


4-1 


g 

rH 

rH 

o 

X 


X 

X 


CO 

#s 

3 

cO 

rH 

CM 

d 

Cv 

M 

X 


M 

CO 

Ci 

cj 

04 

CO 

3 

O 

X 

E 


CJ 

CM X 

X 

o 

d 


X 

CJ 



M 


CO 

4-J 

CO 

co 

s 

X 

04 

CO 

/-V 

X 

E 

d 

cm 

•rH 

Mi 

o 

CO 

X 

co 

T3 

<3 

C/5 

1—1 

o 

E 

H 

CJ 

E 

e 

O 

<D 











3 











Cl 

o 

X 

04 

CO 


m 

50 


00 

05 

X 

r-> 


r~- 

I"- 

r-. 

I''. 

r- 


r^ 

r-» 

4-» 











CJ 











o 











cj 















CO 











4-» 







<r 




cj 











3 







w 




TJ 


CO 





hJ 




O 


44 





PQ 






a 





< 




P-t 


3 





H 






X 









rH 


o 









CO 


Mi 









4-» 

co 

CM 









a> 

44 




CO 






E 

CJ 

0) 



04 







3 

Mi 



d 






rH 

X 

X 



•H 






cO 

O 

3: 


44 

-d 






M 

Mi 



d 

a 

X 





3 

CM 

#s 


04 

cO 

d 





4H 


CO 


0 

E 

04 



CO 


CJ 

0) 

0) 


CM 


0 



rH 


0 

d 

> 


X 

00 

a. 



CO 


Ml 

•H 

r—1 


3 

d 

X 



4-) 


4-J 

rd 

cO 


cr 

•H 

3 



04 


CO 

CJ 

> 

CO 

E 

d 

cr 



e 



cO 


04 


X 

w 





#5 

E 


d 

X 

E 




CO 


00 


00 

X 

d 


00 



3 

CO 

d 

£ 

d 

X 

cO 

X 

d 



O 

u 

•rH 

04 

X 

Mi 


d 

•H 



Mi 

a) 


u 

44 

3 

Pn 

co 

X 



Mi 

a 

e 

o 

cO 

H 

M 


X 



04 

•H 

3 

CO 

X 


04 

d 

d 



Cm 

CO 

rH 


PM 

X 

d 

o 

co 



1 

4-1 

CM 



d 

•H 

•H 

E 



d 

c 


CO 

#5 

co 

E 

X 



g 

O 

o 


00 

04 


a 

CJ 

X 


3 

E 

CJ 

00 

d 

Mi 

CO 

cO 

3 

CO 


d 



d 

•H 

CO 

04 

E 

M 

X 


•H 

Mi 

rH 

•H 

CM 

S 

d 


X 

M 


g 

0) 

CO 

44 

s 

X 

X 

s 

CO 

04 


3 

X 

4-» 

CO 

CO 

Mi 

00 

M 

d 

X 


i—1 

X 

04 

a; 

44 

cO 

d 

cO 

o 

CO 


< 

o 

E 

E 

CO 

E 

e 

Cm 

CJ 

E 


r^ 

00 

05 

o 

1—1 

Csl 

CO 

-<r 

in 

vO 


<f 


<r 

U0 

m 

m 

m 

m 

m 

m 














CO 












CO 


X 












04 


X 






CO 




CO 


CO 


X 






04 




d 


X 


o 






O 




o 


Mi 








X 




X 


CM 


<-3 






> 




X 


Mi 








M 




3 


04 


X 






04 




X 

co 

X 


d 






C/5 




•H 

04 

d 


04 










X 

CO 

w 


0 






M 




CO 

X 



d 



04 



X 


CO 


d 

Mi 

X 


X 



X 



CO 


04 

d 

X 

CM 

d 


cd 



co 



Du 


CJ 

o 


Ml 

04 


X 



M 



04 


X 

X 

X 

04 

0 


Mi 



H 


X 

E 


> 

X 

CO 

X 

d 


04 


CO 


04 

cO 



M 

co 

d 

d 

Mi 


X 


04 

X 

CJ 

X 

X 


04 

04 

o 

e 

04 


d 


CJ 

X 

d 

d 

d 


C/5 

Mi 

•H 


> 


E 


X 

CO 

cO 

04 

cO 



CJ 

X 

X 

O 




> 

X 

M 

E 


CO 

Ml 

04 

CO 

d 

o 


oa 


M 

04 

3 


X 

04 

•H 

E 

CJ 

04 





04 

E 

CO 

X 

CO 

CJ 

CO 


3 

0 

X 


i—i 

CO 

CO 


d 

d 

d 

X 

CM X 

X 

d 

cd 


04 

04 


X 

X 

cO 

o 

> 

04 

d 

E 

Mi 

a 


> 

X 

M 

d 



CO 

Ml 

E 

cO 


04 

o 


cd 

X 

04 

CO 

X 

04 

M 

04 



X 

> 

X 


X 

CM 

£ 


d 

X 

04 

C/5 

04 

CO 

d 

o 



H 

CM 

04 

a) 

CO 

co 

E 


X 

X 

co 

o 




3 

CO 

X 


X 


CO 

•H 

d 





CO 

C/5 


cO 

04 

CO 


CO 

E 

04 

X 

X 

X 

CO 

CO 


#5 

CO 

CJ 

e 

CO 

04 

O 

0 

CO 

CO 

cd 

X 

04 

04 

M 

04 

d 


X 

d 

0 

04 

CJ 

Mi 

Mi 

Ml 

d 

CJ 

04 

X 

cO 

X 

a) 

•H 

o 

CO 

X 

04 

04 

O 

X 

X 

X 

o 

d 

CO 

X 

CO 

X 

3 

X 

X 

X 

CM 

CO 

X 

cO 

f*! 

X 

04 

o 

3 

3 

0 

04 

04 

04 

0 

3 

X 

& 


Pm 

E 

E 

PQ 

< 

<1 

E 

X 

E 

X 

PQ 

o 

o 

X 

Csl 

CO 


m 

50 

l"'- 

00 

05 

O 

X 

CN 

CO 

00 

00 

00 

00 

00 

00 

00 

00 

00 

00 

05 

05 

05 

05 












X 














d 














04 














0 














CM 






to 








•rH 






M 








3 






04 








cr 






d 





X 



E 






X 





d 






X 



rd 





04 



i — 1 



d 



CJ 





0 



cd 



04 



CO 





CM 



CJ 



6 



E 





•H 



X 



CM 








3 



Mi 



X 



CO 





cr 



X 



3 



3 





e 



CJ 



cr 



o 

CO 


CO 





04 



E 



04 

04 


3 


00 



X 




CO 

CO 

d 

d 


X 


d 



w 



X 

04 

04 

co 

•H 


CO 


•H 






d 

d 

d 

X 

E 

CO 

Ml 


Ml 



01 



co 

•H 

•rH 

X 

(4 

04 

co 


•rH 



d 




-d 

jc 

04 

0 

d 

CM 



X 


•H 



E 

o 

CJ 

CJ 

E 

X 

CM 



d 


00 



M 

cO 

cO 

CO 


rC 

< 


X 

04 

CO 

d 



0) 

E 

V—1 
r«i-. 

X 

00 

CJ 


CO 

d 

0 

X 

w 



d 



E 

d 

CO 

X 

04 

co 

CM 

d 




•H 

X 

X 


X 

E 

d 

a 


•H 

04 

<-3 



-d 

cO 

co 

X 

X 


cO 

d 

00 

3 

d 




a 

•H 

X 

d 

3 

E 


co 

d 

cr 

o 

E 



co 

M 

M 

co 

CM 

X 

CO 

X 

X 

e 

Du 

cd 



E 

X 

X 


0 

X 

Mi 

X 

X 


0 

E 

CO 



CO 

CO 

CO 

o 

CO 

O 

CM 

E 

d 

o 

I 

04 


00 

3 

3 

CM 

CJ 

3 

X 

Du 

00 

o 

o 

X 

X 


d 

X 

X 

o 


X 

O 

< 

X 

X 



a 


X 

d 

d 

-d 

X 

d 

E 


X 

X 

a 

*5 

X 


E 

X 

X 

CO 

d 

X 


X 


cO 

X 

CO 

rd 


M 




cO 


a 

1 — 1 

a 

CJ 

d 

04 

01 


O 

X 

X 

04 


04 

X 

o 

•H 

X 

o 

X 

> 


£ 

cO 

cO 

d 

04 

CJ 

Mi 

rd 

Mi 

d 

Mi 

Mi 



X 

X 

M 

X 

CJ 

X 

X 

04 

X 

3 

X 

04 

u 


cO 

CJ 

04 

E 

X 

> 

a 

CO 

a 

Q 

CJ 

X 

o 


X 

04 

d 

CJ 

X 

Mi 

04 

3 

04 

t* 

04 

X 

X 


04 

CM 

04 

co 

X 

04 

X 

o 

X 

o 

1 — 1 

cd 

o 


E 

CO 

O 

E 

o 

C/5 

e 

E 

e 

CJ 

W 

PQ 

E 


r>- 

00 

05 

o 

1 — 1 

CM 

CO 


in 

50 


00 

05 


m 

m 

m 

50 

50 

50 

50 

50 

50 

50 

50 

50 

50 



155 


SOURCE: Clopper Almon, Cost of Capital Variations , University of Maryland Bureau of 

Business and Economic Research Interindustry Forecasting Project, June 12, 1969. 



ACDA/E-156 


3.7 percent. The industry employment results of running the Kaufmann 
defense assumptions through the Almon Interindustry model are given 
in Table 5 for the uncompensated versions and in Table 6 for the com¬ 
pensated versions for the year 1972. Similar projections were run for 
each year 1966 through 1971, but are not reproduced here because of 
space limitations. A summary of the print-out tables is given in 
Table 7. 

The reasonableness of the Almon interindustry projections is 
important, since the employment estimates associated with these pro¬ 
jections for each industry are used as the basis for the national 
control totals which, after various adjustments, are then distributed 
geographically by the regional projections model in order to estimate 
the regional economic impacts of changing defense expenditures. 

IV. 1.4.3 Impacts Upon Regional Economies 

IV. 1.-4.3. a The Harris Model 


In order to make empirical estimates of the regional impacts of 
assumed changes in defense expenditures for this study, the industry 
employment estimates generated by special runs of the Almon national 
interindustry projections model were allocated among states, metropoli¬ 
tan areas, and counties by a regional model developed by Professor 
Curtis C. Harris, Jr. of the Jniversity of Maryland. ^ 


The Harris regional projections model is based upon the use of 
industry location equations which describe the changing locational 
factors which affect the geographic distribution of employment in 
each industry over time. An industry location equation is developed 
for each industry including functional relationships which describe 
its locational shifts in response to shifts of its major supplying and 
selling markets, wage rates, historical trends, and other factors. 


The national employment projections, by industry, are treated as 
a set of control totals, or requirements to produce the output needed 
to satisfy final demand.The regional model then utilizes the 
industry location equations to estimate the geographic distributions of 


For details, see Curtis C. Harris, Jr., State and County Pro¬ 
jections: A Progress Report of the Regional Forecasting Project, 
Occasional Paper Series, Bureau of Business and Economic Research, 

University of Maryland, College Park, Maryland, January, 1969. 

22 

Ibid., p. 1. 


156 











Estimated 1972 Employment, by Industry, Associated with 

Alternative Defense Budgets, without Offset Programs 

(thousands) 

BUDGET A BUDGET B BUDGET C BUDGET D BUDGET E 
($42.2 ($59.4 ($67.6 ($70.5 ($93.6 


ACDA/E-156 


c 


00 

SO 

00 

■vt- 

<r 

CM 

00 


o 

OS 

CO 

rH 


m 

CO 

rH 

o 

•H 

• 

CM 

m 

<r 

tH 

Os 

sO 

m 

CO 

Os 

o 


C ( 

SO 


00 

o 

rH 

rH 

m 

so 

so 

CM 


rH 


sO 


CO 

Ml" 


m 

rH 

CM 

CM 

rH 

*H 

•O 

vO 

rH 

H 



rH 

CM 

H 


CO 

m 

CM 

CM 

CM 

CM 

rH 

iH 

rH 
















JQ 


















CJ 

O 

o 

rH 

CM 

in 


<r 

00 


00 

H 

r^. 

CM 

in 

CO 

CM 

00 

O 

• 

CO 

00 



o> 

rH 

<r 


«H 

00 

00 

r-^ 

o 

sO 


00 

Os 


r —1 


SO 

SO 

rH 

n- 

rH 

SO 

vO 


o 

CO 

Os 

m 

H 

CM 

H 

»— 1 
•H 


sO 

tH 

iH 



rH 

CM 

H 


CO 

in 

H 

CM 

CM 

CM 

H 

rH 

rH 


































/*^ 

c 


sO 

Os 

H 

CM 


rH 


CO 

00 

r-- 

so 

o 

m 

CO 

CM 

00 

o 

• 

CM 

r". 

CO 

<r 

OS 

o 

<1- 


iH 

00 


r-^ 

00 

sO 

r^- 

00 

os 

—J 

rH 


sO 

sO 

rH 


rH 

sO 

sO 


o 

CO 

sO 

m 

rH 

CM 

rH 

tH 

•H 


vO 

rH 

H 



rH 

CM 

rH 


co 

m 

H 

CM 

CM 

CM 

rH 

»H 

rH 
















rO 


















c 

H 

sO 

m 

os 

m 

CO 


Os 

CO 


Os 

Ml - 

CO 

MT 

CM 

rH 

OS 

o 

*H 

rH 

r-l 

•rl 

• 

CM 

m 

CO 

CO 

00 


CO 

CO 

o 

00 

m 

mT 

CO 

SO 


oo 

OS 

rH 


so 

so 

rH 

SO 

rH 

sO 

sO 


os 

CO 

*3- 

m 

«H 

CM 

rH 


sO 

rH 

H 



H 

CM 

tH 


CM 

uo 

H 

CM 

CM 

CM 

rH 

rH 

iH 









Ml- 







JO 



















c 

UO 

00 

O 

CM 


rH 

sO 

CM 

r>* 

UO 

m 

in 

Os 

CM 

H 

o 

m 

o 

1ln J 

o 

o 

CM 

CO 

sO 

Os 

rH 



00 

uo 

sO 

CO 

SO 


00 

os 

Tl 

—-i 

tH 

Mf 

sO 

SO 

H 

uo 

rH 

m 

m 


r- 

CM 

Os 

m 

H 

00 

rH 

ri 

. • 

<* 

sO 

rH 

•H 



rH 

CM 

H 


CM 

uo 


CM 

CM 

CM 

rH 

r-i 

•H 

rH 

rH 





































0) 


















4J 


















o 


















0 


















T) 


















O 









d 









M 









o 




01 





04 









•H 




03 






01 








4-> 




O 






<3 








O 




O 






O 








d 




04 

0) 




<D 

•H 


00 











4-1 





> 


d 






4-J 




d 

o 

£ 



01 

U 


•H 


00 




01 




<3 

d 




•H 

<3 

00 

C 


d 

00 

00 


d 




N 

03 

H 



Pm 

CO 

d 

•H 


•H 

d 

c 


o 



01 

O 

O 

C/3 





•H 

Z 


d 

•H 

•H 


u 



4-1 

U 


to 



03 

rH 

(3 



•H 

c 

a 

a 



00 

o 

04 

04 

Q 



d 


•h 

01 

00 

z 

•H 

*H 

o 

(3 


d 

d 



Z 



d 

lM 

Z 

0 

d 


z 

z 

•H 

o 


•H 


03 

rH 

(H 

M 



0 


o 

•H 

s 



4-» 

d 



o 

d 

iH 


u 


Po 

4J 

<3 

H 

d 


01 

rH 

O 

d 

(3 

a 


d 

•H 


o 


U 

tH 

U 

U 

•H 

<3 

H 

d 

d 

d 

a 

d 

04 


z 


4J 


u 

3 

o 

<3 

z 

tH 

d 

u 

H 

(3 

d 

04 


03 



01 

0) 

01 

a 


Pm 


O 

U 

•H 

4-1 

4-1 

d 


fn 

<3 

d 


<3 

a 

(1) 

•H 

d 

1 

rH 

U 

<3 

S 

01 

d 

d 

4-1 


d 

H 


> 

o 

V4 


o 

a 

d 

4-> 

d 

(3 

d 

•H 


d 

•H 

d 

d 


•H 

u 

o 

00 

M 

o 

o 

C3 

•H 

X 

o 

al 


(3 

d 

d 



hJ 

CJ 

fit 

<2 

H 

z 

CJ 

04 

Z 

CJ 

CJ 

Z 

o 

Z 

Q 

CJ 

O 


• 

rH 

CM 

CO 

<1- 

UO 

sO 

n* 

00 

OS 

o 

H 

CM 

CO 

<r 

uo 

sO 












H 

iH 

rH 

rH 

H 

rH 

rH 

rH 


157 











TABLE 5 (continued) 

BUDGET A BUDGET B BUDGET C BUDGET D BUDGET E 
($42.2 ($59.4 ($67.6 ($70.5 ($93.6 

INDUSTRY _ billion) _ billion) billion) billion) _ billion) 


ACDA/E-156 


00 

m 

ON 


rH 

rH 

00 

o 

of 

in 

o 

r"» 

ON 

vo 

rH 

o 

rH 

rH 

»H 

m 

00 

CO 

o 

ON 

vO 


v£> 

ON 

00 


CO 

m 

CM 

o 


<r 

n* 


CM 

00 

ON 

00 

vO 

00 

00 


00 

CO 

vO 


00 

CM 



CM 

rH 


in 


n* 

rH 

<3- 


CO 

rH 

m 

CM 

rH 


in co 


00 

m 

00 

ON 

CO 

o 

CM 

rH 

CM 

m 

rH 

00 

<r 

00 

in 

in 

r- 

CM 

On 

in 

m 

m 

m 

1^ 

00 

ON 

o 

00 


ON 


<3* 

CM 


ON 

00 

vO 

00 




CO 

m 

CO 

m 


CM 

rH 


m 



rH 

<3- 


CO 

rH 

m 

CM 

rH 


r^- 

CM 


LT) CM 


00 

CM 

r^. 

ON 

CO 

ON 

00 

CM 

CO 

m 


m 

vO 

rH 

CO 

m 

r*- 

CM 

ON 

m 



m 

vO 

00 

r^. 

o 


r"-. 

00 



CM 


ON 

00 

vO 

00 

r-» 


r^. 

CO 

m 

CO 

m 


CM 

rH 


m 



rH 



CO 

rH 

m 

CM 

rH 


CM 


CM 


00 

00 

NO 

00 

rH 

m 

o 


rH 

m 

00 

CO 

00 

m 

o 

m 

vO 

CM 

ON 

CO 

-d 



CO 

00 

m 

ON 


m 

On 



CM 


ON 

00 

VO 

00 

r^. 


r"- 

CM 

m 

CO 

-d 


CM 

rH 


m 



rH 

<r 


CO 

rH 

m 

CM 

rH 


CM 


cm 


o 


00 

CO 



m 

CM 

rH 

m 

m 

CM 

ON 


CO 

CM 


r^. 


CM 


00 

00 

VO 



CM 

rH 


m 


r"» 


CM 

00 


vo 


CO 

rH 

m 


o 

CM 

oo 

CM 

NO 

00 

CM 

NO 



CM 


CO 

CM 


CO 

rH 

m 

CM 

rH 


co 

4-» 

o 

3 

X 

O 

u 

CU 

to 

u 

<u 

cd 

CP 


CO 


co 

*-> 

o 

3 

TO 

o 

u 

cu 

X 
O 
O 
U -1 

co 

3 

o 

0) 


d 

cd 


(0 

3 

O 

<D 

d 

cd 


0) 

o 

co 


x 

o 

CJ 


X 

d 

cd 

co 

CD 

rH 

•H 

4J 

X 

<D 

H 


I 

X 

3 

rH 

O 

X 

w 


CO 




CO 

d 


cd 

u 




<u 

cd 



•H CO 




00 

rH 

o 

CO 

H CD 

1-1 



cd 

rH 

o 

o 

rH 

<D 

u 


u 

a> 

o 

•H 

* % H 

u 

cd 

x 

<D 

o 

cd 

u 

C0 4-1 

cd 

00 

d 

> 

CO 


JD 

00 x 

Cu 

3 

cd 

cu 

•H 

o 

cd 

3 cd 

cu 

CO 

V 

PQ 

S 

H 

CH 

c* H 

< 

ON 

o 

rH 

CM 

CO 

<* 

m 

NO 

rH 

CM 

CM 

CM 

CM 

CM 

CM 

CM 




to 
Pi 
r-H a) 
O 4-1 

jd co 

0) rH 

co o 
3 42 
o cu 

33 zd 


CO 



0) 


#N 



4-> 



H 


CO 

0) 


O 


CO 

3 


4-1 

d 


3 


H 

4-1 

d) 

O 

•H 

CO 

X) 


d) 

•H 

u 

3 

cd 

u 

o 

CO 

d 

d 

3 

X 

4-1 

a; 

u 

u 

•H 


4-> 

o 

d 

d 

cu 

d) 

cd 

3 

•H 

u 

o 

•H 


d 

4J 

Eh 

d 

cu 

CJ 

cd 

X) 

•H 

d 


V4 



4-1 

d 

cd 

o 

X 

3 

X 

00 

d 

cd 

u 

o 

rH 

Eh 

d 

d 

o 


d 


O 


cd 

% H 

u 

u 

o 

d 

X 

d) 


X 


cd 

u 

<d 

<D 

o 

u 

3 

u 

rg 


X 

CO 

•H 

o 

rH 

d) 

6 

00 

O 

3 

4-1 

Cu 

o 

cu 

3 

d 

O 

O 

44 

cd 

X 

cd 

kJ 

•H 


33 

O 

cu 

w 

cu 

00 


ON 

O 

rH 

CM 


• 

CO 

CM 


CM 

CO 

CO 

CO 


CO 


00 
d 
•H 
-d 
CO 
•H 
»—I 

rJD 

3 

P-. 

X) 

s 

00 

d 

•H 

4-1 

d 

•H 

a. 


cn 


158 










ACDA/E-156 


W 

X c 
H • O 
w n *h 

O ON X 
Q <s> X 
JZ) s — / X 
PQ X 


o 

oo 

X 

UO 

03 

03 

o 

X 

X 

m 

X 

CO 

o 


Mf 

CO 

n* 

Ml- 


m 

X 

<r 

X 


o 

03 

m 

00 

03 

X 

m 

rH 

CM 

vD 

CO 

03 


O 

00 

m 

03 

rH 

00 

r>* 

00 

CO 

CO 

CM 


rH 

m 



rH 

<r 

03 

rH 

rH 

rH 





<3- 


Q 


/*"N 

03 

rH 


CO 

rH 

m 

00 


in 

d 








H 

• 

o 

X 

co 

CO 

X 

CO 

CM 

CO 

U 

o 

H 


rH 

CM 

X 

CO 

00 


o 


rH 

CO 

CO 

CM 


rH 

m 


o 

</> 

rH 








td 


*H 








PQ 


X 








X 



m 

CO 


CM 

rH 

CO 

00 


X 

c? 








H 

• 

o 

x 

CM 

CO 

X 

CO 

o 

CO 

W 

n* 

*H 

<r 

rH 

CM 

3d 

CO 

00 


o 

X 

rH 

CO 

CO 

CM 


rH 

m 


Q 

-GO- 

rH 








X 

3-_x 









PQ 


X 










CM 

00 

<r 

rH 

3d 

vd 

03 

03 

3d 

CO 

o 

o 


iH 

rH 

in 


O 

00 


3d 

o 


3d 

00 

3d 


rH 

<3- 

03 

rH 

rH 

rH 


<1- 



CO 

03 

rH 

3d 


03 

00 

vd 

vd 

CM 

03 

in 

m 

00 

r-. 

in 

r^- 

o 

00 

CO 

m 

o 

3d 

in 

00 

vd 


rH 


03 

rH 

rH 

iH 


<r 


X 

CD 

d 

PQ 



d 


<3- 

d 

*H 

H 

• 

o 

4J 

W 

03 

*H 

d 

X 

m 

rH 

o 

Q 

-GO- 

rH 

o 

x 


X 

3_^ 

PQ 





in 

00 


r-'- 


00 

CO 

00 

00 

m 

vd 

Vd 

m 

vd 

CM 

CO 

o 

CM 

m 

rH 

<1- 

CO 

3d 

o 

m 

03 

CM 

CM 

rH 

m 

CO 

<r 

rH 

CM 

vd 

CO 


<r 

o 

00 

CO 

CO 

O 

vd 

m 

00 

vd 

CO 

CO 

CM 


rH 

in 



rH 


03 

rH 

rH 

rH 


<r 


m 


w 

x 

pq 

< 

H 


< 

CM C! 

03 

CO 

<r 

CO 

rH 

o 

X 


co 

m 

00 

mT 

r-. 

00 

f"- 

o 


CM 


H 

• O 

X 

X 

rH 


00 

CM 

CO 


X 


in 

CO 

m 

03 


m 


CM 


W 

CM X 

CO 

o 

CM 

X 

CM 

X 

<r 


o 


CM 

o 

03 


co 

00 


m 


X 

"d" rH 

CO 

CO 

CM 


rH 

m 




rH 

<3- 

03 


rH 

X 





Q 

</> rH 




















X 

-h 




















PQ 

X 






































X 





















d 










CO 











u 







4-J 



4-J 











d 







d) 

CO 


d 











4-J 







rH 

4-J 


d 




CO 





CO 


O 


d) 




CO 

•H 

o 


X 




4-J 

CO 




rH 


d 


d 




o 

o 

d 


o 


d) 


CJ 

4-J 




d 


u 






•H 

H 

X 


u 


X 


d 

U 




4-1 


4-1 


X 




4-> 


o 


PH 


4-J 


•x 

d 




d) 


CQ 


a 




d> 

X 

H 




d 


o 

X 




S 




d 




X 

d 

PH 

00 

O 


d) 


H 

o 






#3 






4-J 

d 


d 

•H 


X 


PH 

H 




CO 


00 




>-< 


d 


X 

•H 

4-J 





PH 




d 

CO 

d 





CO 

>3 

00 

Cl) 

d 

CO 

00 



CO 





o 

H 

•H 


(D 


H 

rH 

CO 

d 

•H 

•H 

d 

d 

<D 


CO 

>3 

rH 



H 

d) 

X 

CO 



CO 

d 


•H 

rH 

MH 

rH 

•H 

X 


d 

d 

CD 




d 

e 

4-J 

O 


X 

o 

X 

d 

rH 

CD 

PH 

d 

4-» 


rH 

rH 

CD 



<D 

•H 

d 

o 

CQ 


Q 

•H 

d 

d 

< 

Dd 


d 

o 


x 

X 

4-J 



X 

d 

rH 

d 



Z 

e 

d 

d) 



X 

d 





CQ 



1 

4-J 

X 

X 

* 


X 

CD 


rH 

X 

B 

d 

H 

X 


X 

X 




d 

d 


o 

CO 



' X 

CO 

x 

d 

d 

d 


d 

CO 

d 

d 

X 


B 

o 

o 


Hi 

00 



. x 

o 


d 

CD 


H 

d 

4-J 

d 

d 

d 


d 


X 

00 X 

d 







rH 


CD 


o 



d 

u 

d 



d 


•H 



o 

4-J 

CO CO 

4-» 

o 

d) 

X 

CO 

d 

co 

d) 


CD 

•H 

u 

rH 

•H 

rH 

e* 



, *H 

CO 

oo 6 

d 

H 

X 

4-J 

<D 

X 

CO 

d 

d 

PH 


d) 

d 

4-J 

d 

e 



co 

d 

d <D 

•H 

4-J 

X 

d 

o 

0 

d 

o 

o 

PH 

d 

X 

4-J 

d 

4-J 

d 



d 

rH 

H 4—1 

d 

(D 

d 

CD 

X 

H 

rH 

4-J 

H 

O 

rH 

4-J 

dj 

d) 

d) 

4-J 



PQ 

PH 

O X 

PH 

PH 

pd 

X 

GO 

PH 

x 

CQ 

M 

X 

C 

o 

S 

PC 

£ 

CQ 



• 

m 

• 

X 


00 

03 

o 

rH 

CM 


CO 


m 

X 


oo 

03 

o 


X 



CO 

CO 

CO 

CO 

CO 


Mf 

<r 




-o- 

<3- 



<3- 

m 


m 


159 


Products 330.0 345.3 352.2 355.9 375.5 











TABLE 5 (continued) 

BUDGET A BUDGET B BUDGET C BUDGET D BUDGET E 
($42.2 ($59.4 ($67.6 ($70.5 ($93.6 

INDUSTRY _ billion) _ billion) billion) billion) _ billion) 


ACDA/E-156 


<r r- cm 

• • • 

no oo <r 

r-- «h in 

r—I rH 


rH 

rH 

rH 

m 

• 

• 

• 

• 

nO 

rH 

m 

nO 

00 

ON 

00 

r- 

rH 


CO 

rH 


ON 

in 

m 

00 

• 

• 

• 

• 

r- 

ON 

rH 

CM 

o 

St 

m 

CO 

CO 

CM 

CO 

rH 


vD 

ON 

00 


st 

• 

• 

• 

• 

• 

<r 

vO 

CM 

m 

r-- 

CM 

NO 

CO 

CM 

rH 

m 

rH 

CM 

oo 

NO 


ON 

st 

CO 

NO 

NO 

NO 


CO 

• 

• 

• 

• 

• 

• 

• 

• 

ON 

CO 

CO 

ON 

r- 

m 

CM 

CM 

m 

rH 

m 


00 

m 

r- 

ON 

st 

rH 

rH 

rH 


CO 

rH 

CM 


CO 

st 

CO 

m 

St 

CM 

St 

ON 

• 

• 

• 

• 

• 

• 

• 

• 

r- 

CO 

CO 

ON 

r- 

ON 

CM 

o 

m 

rH 

m 

r- 

00 

St 

f^- 

ON 

St 

rH 

rH 

rH 


CO 

rn 

CM 


o 

ON 

00 

St 

00 

CM 

r-. 

CM 

• 

• 

• 

• 

• 

• 

• 

• 

rH 

o 

CM 

NO 

m 

ON 

o 

st 

m 

rH 

m 

to¬ 

00 

CO 

fo- 

00 

St 

rH 

rH 

rn 


CO 

I—i 

CM 


fo- 

rH 

m 

r- 

CO 

CO 

00 

m 

• 

• 

• 

• 

• 

• 

• 

• 

CO 

00 

o 

ON 

NO 

St 

00 

o 

rH 

CM 

CO 

ON 

NO 

CM 

m 

CM 

CM 

CO 

rH 

st 

rH 

CM 

NO 

m 


co 

ON 

Sf 

r- 

CO 

NO 

O 

r- 

• 

• 

• 

• 

• 

• 

• 

• 

m 

rH 

O 

in 

NO 

CM 

00 

CM 

o 

CM 

CO 

On 

NO 

CM 

o 

ON 

CM 

CO 

rH 

st 

rH 

CM 

NO 

St 


NO 

NO 

CO 

o 

o 

NO 


CM 

• 

• 

• 

• 

• 

• 

• 

• 

CO 

St 

ON 

vO 

NO 

ON 

ON 


On 

rH 

CM 

00 

NO 

rH 

in 

NO 

rH 

CO 

rH 

st 

\—1 

CM 

m 




St 

CO 



NO 

CM 


in 

oo 

CM 


rH 


ON 

r-- 

00 

st 


00 

rH 

cn 


NO 

St 

rH 


00 

CM 


t- 

NO 

00 


ON 


ON 

NO 

cn 

m 


CM 

NO 

00 


CO 

O 

n 


NO 

00 


rH 

NO 

NO 


NO 


ON 

CM 

NO 

NO 


rH 

NO 

o 


St 

rH 

rH 


rH 



CO 

rH 

CM 


rH 


CM 

rH 

St 

iH 


CM 

st 

st 




•m 













CO 

d 


00 







d 



4-1 



CO 

CO 






4-J 


d 




#N 



a> 



d 



(D 

<D 






cd 


•H 




CO 



6 



0) 

d 


d 

d 





CO 

u 






CL) 



Oh 



0 

cd 


•H 

•H 





CD 

cd 


•H 




> 



*H 

00 


<x 



ad 

ad 





d 

CH 




4-J 


rH 



0 

d 


•H 



a 

o 


CO 



•H 

Oh 




d 


cd 



cr 

•H 


P3 



cd 

cd 


CD 



ad 

<J 


'O 


§ 

CO 

> 


CO 

W 

d 


O* 

CD 


X 

S 


d 

00 


a 


CO 

d 


0 

4-J 



0) 




pa 

d 






d 


cd 

Ti 

CD 

cd 


Oh 

d 



c 

T3 

X 





rH 

iH 


ad 

•H 


:s 

d 

o 



•H 

<D 

oo 


•H 

d 



00 

ad 


cd 

cd 

T3 

o 

4J 



cd 

d 

00 


P3 

d 

d 


HO 

cd 



d 

u 


•H 

•H 

d 

cd 

d 




cd 

d 


cr 

o 

•H 


u 


PJ 


•H 

cd 


u 

u 

cd 

S 

Oh 


L 

CO 

•H 

•H 


pa 

& 

-u 


0 


cd 


rH 

£ 


4-J 

4-1 



B 


4-J 

u 

tH 

4J 



0 

cd 

CO 

H 

u 






CO 

CO 

CO 

CO 

o 


CO 

o 

Oh 

ad 


d 

o 

rH 

u 


cd 

a 


d 

00 


P3 

P3 

cu 

d 

o 


d 

4-J 

Oh 

00 


o 

CJ 

PH 

o 

T) 

d 

o 


cd 

d 


T3 


o 

o 




o 

<J 

*H 


•H 



PJ 

CS 

*H 



Pd 



d 

d 

ad 

CD 

'O 


d 

X 


rJ 


4J 

o 


*0 

cd 

ad 

4-J 




4-> 

M 

n 

CO 

d 

d 


M 


T3 


4-J 

cd 

•H 

cd 

O 


o 

o 

CO 

rH 

M 

d 




Cd 

cd 

CO 


o 

rH 

O 

d 

o 

d 

u 

U 

CO 

cd 

P3 

CD 

c£ 

O 

0) 

rH 

rH 

CD 

rH 


CD 

CD 

•H 

O 

•H 

0) 

•H 

o 

cd 

PH 

0) 

X 

U 

d 

•H 

£ 

0 

cd 

cd 

d 

rH 

<D 

d 

a 

is 

ad 

U 

0 

d 

u 

£ 


d 

a 

4J 

•H 

V4 

rH 

Oh 

*rl 

O 

*rl 

(D 

O 

•rH 

•H 

4-J 

CD 

4-J 

O. 

3 

4-J 

-a 

CD 

•H 

CO 

ad 

CD 

cd 

*H 

O 

<D 

ad 

o 

•rH 

ad 

> 

o 

CO 

o 

•H 


o 

u 

M 

00 

u 

d 

o 

4-> 

4-J 

P3 

<D 

d 

o 

CO 

4H 

o 

O 

CD 

P3 

<D 

P3 

§ 

CD 

cd 

*H 

d 

cd 

O 


«g 

a) 

cr 

Cu 

a) 

eg 

•H 

4H 

cd 

CD 

rH 

o 

rH 

a 4 

o 

rH 

Pd 


w 

pH 

CJ 

X 

£ 

£ 

w 

CO 

o 

X 


O 

£ 

00 

w 

Pd 

pa 

pa 

o 

W 

CM 


CO 

st 

m 


NO 

t- 


00 

ON 

o 


rH 


CM 

cn 

St 

in 


NO 

t- 

m 


m 

in 

n 


m 

in 


in 

n 

NO 


NO 


NO 

NO 

NO 

NO 


NO 

NO 


160 








TABLE 5 (continued) 

BUDGET A BUDGET B BUDGET C BUDGET D BUDGET E 
($42.2 ($59.4 ($67.6 ($70.5 ($93.6 

INDUSTRY _ billion) billion) billion) billion) billion) 


ACDA/E-156 


vD 

vO 

H 

o 

vo 

CO 

MP 

rH 

CO 

o 


CM 

VO 

CM 

<r 

rH 

o 

05 

P 

o 

o 

p 

CO 

VO 

o 

rH 

<r 

p 

<r 

CO 

vD 

CO 

CO 

vO 

H 


rH 


00 

p 

H 

vO 

05 

<r 

00 

CO 

m 

in 

o 

P 

o 

H 

00 

p 


CM 

r—1 


05 

CM 

p 

rH 

CO 

CM 


m 

vO 

rH 

vO 

CO 

00 

CO 

co 


05 

CO 

00 

H 

rH 

CO 

p 

o 

05 

CO 

p 

in 

CM 

CO 

oo 

CM 

CO 

vO 

o 

m 

m 

o 

05 

CO 

vO 

vO 

rH 

CO 

00 

CO 

CM 

CM 

00 

vO 

rH 


CM 

00 

p 

vO 

H 

O 

P 


00 

CM 

in 

CO 

00 

vo 

p 

rH 

00 

m 

CO 

CM 

H 


05 

P 

H 

CO 

CM 



m 

00 

CM 








CM 






vO 

CO 


CO 


00 


p 

00 

vo 

H 

m 

H 

vO 

H 


rH 

CM 

o 

CM 

00 

CM 

vO 

o 

05 

vO 

p 

o 

CO 

CO 


H 

CO 

00 

CO 

05 

o 

p- 

CO 

H 


00 

p 

vD 

p 

H 

o 

P 

<r 

00 

CM 

in 

rH 

00 

vD 

p 

rH 

00 

•<r 

CO 

CM 

rH 


05 

P 

H 

co 

CM 


MT 

in 

00 

CM 








CM 






vO 

CO 


CO 


m 

p 

o 

o 

oo 

H 

in 

Mf 

H 

05 

CO 

vD 

o 

CO 

05 

p 

p 

m 

vO 

vO 

m 

o 

00 

CM 

00 

05 

05 

rH 

in 

CO 

p 

rH 

m 

o 

rH 

CO 

CM 

n 

vO 

vO 

rH 

P- 

vO 

CO 

00 

CM 

in 

vO 

p 

vD 

vD 

rH 

00 


CO 

CM 

H 

<p 

oo 

P 

rH 

CO 

CM 


CO 

in 

00 

CM 


cm vo co co 



CM 

CM 

in 

CO 

o 


05 


vD 

00 

p 

05 

o 

vO 

vO 

p 

in 

P 




CM 

P 

p 

<r 

m 


CM 


05 

p 

vO 

v£> 

00 

05 

CM 


CM 

o 


r—4 


H 

CM 

00 

o 



vD 


O 

H 

in 

CO 

p 

H 

n 


m 

vD 


CO 


rH 

00 

CM 

CO 

CM 


H 


<r 

00 

p 

H 

CO 

CM 


CM 

in 

00 


CM 











CM 






v£> 

CO 



CO 







r 










rH 









X) 















V4 






C 




X) 








03 



•H 


G 




cd 




0) 








X) 



cd 


C 






O 


3-4 








cd 



d. 


•H 




co 


*H 


d 








3-4 



03 


00 




3-4 

CO 

X 


4-> 




00 




H 


H 

Pd 


d 




0) 

X 

a 


O 




d 



co 


03 

cd 



w 

+j 



H 

o 

03 


03 




•H 



0) 

H 

o 

4-1 

X3 



d 



•H 

O 

3-4 


4-4 




4-1 



u 

•H 

d 

d 

d 


03 

a; 


CO 

cd 

H 

00 


0 




CO 

CO 


•H 

cd 

cd 

03 

cd 



b 


4-1 

3-1 

o 

O 


d 




cd 

03 


> 

4-1 

3-4 

Ptf 



X 

Cu 



H 


4H 


cd 




o 

•rH 


3-1 

03 

d 


rH 


cd 

•H 


cd 


X) 

O 


X 




X 

4-4 


03 


CO 

XJ 

cd 


X 

0 

CO 

x 


d 

X 




a 


cd 

•H 


CO 


d 

d 

d 


i 

o' 

0) 


CO 

cd 

CH 


CO 


o 

d 

o 

H 

CO 


x> 

M 

cd 

o 


X 

w 

H 

XJ 

d 




3 


•H 

o 


•H 

03 

3-4 

d 



co 




o 

d 

•H 

co 

X) 


O 


4J 

•H 

PQ 

4-> 

•H 

03 

cd 

X) 

(U 

>-i 


r\ 

rH 

•H 

cd 

cd 

4-1 

e 


03 


cd 

4-1 


X 

4-1 

£ 


d 

4-1 

03 


co 

03 

x 


3-4 

c 

cd 

4-> 

c 


4-> 

cd 

> 


•H 

03 

03 

cd 

cd 

d4 


G 

a 

G 

4-1 

H 

03 


d 

cd 

co 

3-4 

a 

H 

a 

rH 

CO 

rH 


4-1 


CO 

•H 

•H 

> 

4-1 


B 

H 

g 

H 

4-1 

O 

•H 


•H 

•H 


cd 

03 

CO 

' #\ 

G 


u 


03 

** co 

0 

cd 

B 

H 

a 

a 

d 

#1 

3-4 

4J 


CO 

G 

W 

CO 

G 

G 

u 


M 

CO 0) 


o 

a 

03 


C0 

d 

O 

4-1 

X 

3-4 

03 

d 


rH 

•H 

4J 

o 

o 

CJ 

C4 '—1 

■U 

•H 

•H 

a 

X3 

d 

s 

•H 

O 


03 

H 

cd 

rH 

G 

> 

4-1 

a) 

4-1 

3-4 

*H G 

CO 

4-1 

0 

co 

O 

cd 

§ 

x> 

03 

CO 

4-1 

o 

d 

cd 

4-1 

3-4 

cd 

rH 

o 

H 

rd 

C 

a 

CT 

•H 

U 

3-4 

o 

cd 

H 

cd 

cd 

X2 

•H 

G 

o 

G 

PQ 

w 

2 

c 

CO CJ 

M 

o 

w 

£ 

P-. 

H 

CJ 

X 

w 

o 



Pn 


X 

CO 

00 


05 

o 

rH 

CM 

CO 




m 

vO 

p 

00 

05 

o 

H 

CM 

CO 



vO 


vO 

p 

p 

P 

p 


p 


p 

P 

p 

p 

P 

00 

00 

00 

00 

00 



161 









ACDA/E-156 


X) 

QJ 

P 

d 

•H 

4-J 

d 

o 

a 


m 

w 

CQ 

< 

H 


w 


<r 

r- 

in 

CM 

00 

CM 

o 


o 

o 


v£> d 

• 

• 

• 

• 

• 

• 

• 


• 

• 

H 

• O 

m 

O' 

o 

O' 

00 

CO 

o 


o 

o 

W 

CO *H 

CM 

rH 

rH 

O' 


in 





O 

CTn rH 

00 

in 

00 

CO 

O' 

in 





Q </> rH 

rH 



00 








'-r' *H 











PQ 

X> 











Q 


o 

CO 

o 

vD 

iD 

CO 

o 


o 

o 


m d 

• 

• 

• 

• 

• 

• 

• 


• 

• 

H 

. o 

rH 

m 

MO 

o 


O' 

o 


o 

o 

W 

O *H 

O' 

rH 

O 

m 

kD 

<r 





O 

rH 


in 

00 

00 

O' 

m 





Q 

</y rH 

rH 



00 







CD 

^ *H 











PQ 












CJ> 


r^. 

o 

O' 

m 

00 

00 

o 


o 

o 


vo d 











H 

• o 

00 

in 

m 

CO 

CM 

00 

o 


o 

o 

W 

r*'* *H 

00 

rH 

o 

m 

iD 

M}- 





O 

vO rH 

I''- 

m 

00 

00 

O' 

m 





Q 

</> rH 

rH 



00 







HQ 

w -H 











PQ 

XI 











PQ 


co 

o 

00 

m 

rH 

CM 

o 


o 

o 


<r d 









• 

• 

H 

• o 

CO 

CO 

CO 


r>- 

r- 

o 


o 

o 

PJ 

O'' *H 

l"" 

rH 

o 

CM 

m 

<r 





O 

in rH 


m 

00 

00 

O' 

m 





Q </> rH 

rH 



00 







CD 












PQ 

xi 











<d 


O' 

co 

m 

O' 

00 

CO 

o 


o 

o 


CM d 











H 

• o 

m 

00 

00 

O' 

CO 

CO 

o 


o 

o 

PJ 

CM -H 

CO 

o 

O' 

m 

<r 

<r 





O 

*vf rH 

r"» 

in 

r- 


O' 

m 





Q 

•CO* r— 

rH 



00 







CD 

*H 





CO 






CQ 

X> 





<D 












CO 












•H 









co 



H 

4-J 








d 

d 


CL 

C 








o 

o 


H 

d 








•H 

•H 

rH 

CD 

B 








> 

4-1 

d 

4-» 

d 









d 

d 

d 

U 








CD 

(D 

o 

w 

d 








CO 

H 

•H 


> 


X? 

CO 






O 

4-1 

4-J 

Q 


d 

4-J 




co 

U 

d 

d 

d 

O' 


d 

<4-4 




Q) 

•H 

Pi 

a 

d 

J 



•H 




O 

d 


P 

6 

rH 


rH 

o 

CO 


Pi 

•H 

a 

XJ 

X) 

d 

d 


d 


d 


H 

> 

(D 

d 

w 

P4 

o 


> 

4-J 

•H 


CO 


oi 

d 

CO 

d 

o 


d 

d 

H 


cd 

a) 



xj d 

> 

►J CO 


u 

d 

Du 


Q 

CO 

CD 

co 

d o 

o 

d 


H 

B 

a 


53 


rH 

4J 

d *h 

o 

X) CO 



d 

p 


M 

CO 

•H 

d 

4J 


d -h 


CO 

•»H 

CO 



co 

X) 

a) 

rH 0 

rH 

d n 

CO 

CO 

d 




d 

Q 

6 

d 4-i 

d 

Du 

4-J 

d 

4-J 

d 



d 

6 

CD 

U *H 

u 

d H 

V4 

d 

u 

o 



•H 

o 

CO 

•H 4-J 

d 

4-J d 

o 

*H 

d 

•H 



CO 

4-» 

P 

X> CO 

X) 

d 4-1 

Du 

CO 

4-J 

*4-4 



3 

P 

B 

d d 

d 

4-J d 

B 

P 

c 

*4-4 



PQ 

< 

<J 

S w 

Pm 

CO W 

IH 

PQ 

w 

o 



m 

vD 


oo 

O' 

o 

rH 

CM 


• 

CO 



00 

00 

00 

00 

00 

O' 

O' 

O' 


O' 


162 









ACDA/E-156 


X 


w 

XJ 

5 

H 




W 



CM 





















X 

G 

m 

o 

on 

o 

ON 

CQ 

CO 

m 

00 

00 

rH 

X 

m 

00 

CQ 

<r 

rH 



H 

• 

O 



ON 


















W 

CQ 

X 

i — 


O 

o 

ON 

CQ 

x 

o 

CO 

X 

00 

rH 

rH 

m 

CQ 

00 

r^- 



o 

ON 

rH 

00 

rH 

m 

X 

CM 

x 

rH 

X 

X 


rH 

CM 

c*. 

in 

rH 

CM 

rH 

X 



Q </> 

rH 

CQ 

X 

rH 

rH 



rH 

CM 

rH 


CM 

in 

CM 

CM 

CM 

CM 

rH 

CM 



G) 

'w' 

X 

rH 

X 



















PQ 


rO 





















CJ 


/—S 






















X 

G 





















H 

m 

O 

m 

rH 

X 

m 

CQ 

o 


X 

X 

00 

in 

CM 

o 

O 

m 

r- 

o 

ON 



W 


X 

• 




















O 

vO 

rH 

m 

rH 

<r 

<r 

ON 

rH 


00 

rH 

CO 

X 

ON 

00 

r^. 


00 

o 

rH 

X 


Q 

</> 

rH 

rH 

m 

X 

X 

X 

x 

X 

X 

X 


rH 

CQ 

X 

m 

rH 

CM 

CM 


X 


CD 

V 

•H 

<3- 

X 

rH 

X 



X 

CM 

rH 


CQ 

in 

X 

CM 

CM 

CM 

rH 

CM 

£ 

CO 

PQ 


JO 

!—1 

rH 

















TD 

a 






















0) 

G 






















X 

X 






















G 

00 

PQ 

/-\ 

/'“N 



















X 

o 

<3* 

G 


X 

CM 

m 

O 

CQ 

X 

rH 

X 

00 

00 

rH 

in 

in 

O 

CM 

<3- 

CQ 

o 

X 

H 

• 

o 

CQ 


















o 

Ph 

w 

ON 

X 

o 

X 

X 

ON 

CO 

<3" 

x 

"H 

00 

CM 

rH 

CQ 

CO 

00 

o 

o 

CQ 

CO 

o 

in 

rH 

CM 

X 

X 

X 

rH 

X 

X 

X 

X 



<r 


in 

X 

CQ 

CM 


CO 

4-J 

Q 

</> X 

M* 

X 

rH 

rH 



rH 

CM 

H 


CQ 

in 

X 

CM 

CM 

CM 

rH 

CM 

< 

<D 

G) 

v-' 

♦H 

rH 

rH 


















CO 

PQ 


XI 



















0k 

X 






















>N 

<4-1 






















X 

o 






















X 























co 

3 

x> 

jg 

<J 

CM 

• 




















4-J 

•H 

H 

G 

O 

rH 

CQ 

00 

CM 

X 


X 

<r 

o 

oo 

Mf 

CQ 

in 

X 

ON 

CM 

CM 

O 

g 

X 

? CO 
T3 

W 

CD 

CM 

•H 

rH 

ON 

X 

X 


X 

X 

<3- 

CM 

rH 

CO 

CQ 

CQ 


rH 

00 

CQ 

rH 

X 


* C3 

Q 

</> 

rH 

CQ 

I"'- 

X 

X 

rH 

X 

rH 

X 

X 


ON 

•<r 

ON 

X 

rH 

CQ 

CM 

r~- 


CO G 

ID 

v^ 

*H 


X 

rH 

rH 



rH 

CM 

rH 


CQ 

m 


CM 

CM 

CM 

rH 

CM 

jO 

X CO 

G G 

PQ 


X 

rH 

rH 

















#N 

00 o 






















4-1 

XJ JG 






















G 

3 X 






















G 

C2 

PQ ^ 






















1, 

a) 






















o 

CO 






















rH 

G 






















cx 

G 






















g 

X 






















w 

G 






















CM 

Q 






CO 
















1^. 

<D 






4-1 
















a\ 

> 






o 
















rH 

X 

4_) 






G 

XJ 
















xj 

a) 

4-1 

G 

a 

X 

4_» 

CO 

w 

G 

c 

X 

a) 

4-1 

X 

< 



INDUSTRY 



O 

X 

Pu 

>n 

X 

a) 

X 

CO 

G 

O 

X 

> 


00 

G 


00 




G 

O 

X 

X 

o 

G 

X 

X 



f 

CO 

T3 

O 

O 

Pj 

c 

CO 

X 

u 








CO 

x 


•H 





CO 




G 

G 








*H 

0) 

00 

G 


G 

00 

00 


G 




N 

x) 

(0 








X 

CQ 

c 

•H 


•H 

G 

G 


O 



CO 

O 

o 

X 










•H 

E 


G 

X 

X 


CJ 



X 

X 

X 

o 








X) 

X 

G 



•H 

G 

G 

G 



00 

o 

Cx-I 

PX 

G 








G 

G 

X 

CO 

00 

E 

X 

X 

O 

CD 


G 

G 



X3 








G 

X 

e 

G 

G 


E 

E 

X 

CJ 


•H 

T3 


rH 

O 






j* 



G 


o 

X 

e 



X 

G 



O 

c 

X 

X 






o 


>> 

X 

G 

x 

G 

G 

CO 

rH 

o 

G 

G 

a 

X 

G 

•H 

CX 






o 


X 

rH 

X 

X 

X 

0) 

rH 

G 

G 

C 

O 

G 

cx 


E 







4-1 


X 

G 

O 

0) 

E 

rH 

G 

CJ 

X 

G 

c 

CX 


X) 


>N 






CO 

CO 

CO 

o 


pH 


o 

X 

X 

X 

X 

G 



G 

C 

X 






0) 

Ou 

G 

•H 

G 

1 

X 

X 

<1> 

e 

CO 

C 

G 

X 

X 

G 

X 

G 






> 

o 

X 

X 

O 

c 

G 

X 

G 

G 

G 

•H 

X) 

G 

X 

G 

G 







•H 

x 

O 

00 

X 

o 

O 

<D 

X 

x: 

o 

g 

X 

G 

G 

G 

X 

G 







V 

Pj 

< 

X 

E 

CJ 

PH 

E 

u 

o 

E 

o 

s 

G 

O 

o 

PQ 






• 

r—1 

CM 

CQ 


m 

X 

r- 

X 

ON 

o 

rH 

CM 

CQ 

-<r 

in 

X 

r*- 

00 














rH 

rH 

rH 

rH 

rH 

rH 

rH 

X 

rH 


163 








ACDA/E-156 


w 



X 

X 

CM 

a> 

00 

o 

in 

rH 

O 

ON 

m 

CO 

ON 

•<r 

r>. 

<r 

o 

NO 

CM 


rH 


X 

CJ 

• 




















• 

H 

• 

o 

O 

m 

co 

o 

00 

X 

rH 

rH 

O 

X 

00 

ON 

oo 

rH 

m 

o 

NO 

O 

o 

in 

CO 

W 

CO 

•H 



CO 

CM 

r«* 


00 

ON 

00 

X 


X 

CM 

m 

CO 

CO 

<5- 

rH 

CM 

iO 

CO 

CJ 

ON 

rH 



CM 

rH 


uo 


X 

rH 

<* 


CO 

rH 

m 

CM 

rH 

CO 

CO 

CM 


rH 


Q </> X 
XD v ~' X 
PQ X 


CJ 



NO 

c 

CO 

ON 

CO 

O 

o 

NO 


<r 

ON 

rH 

m 

CM 

o 

ON 

r-^ 

CO 

CM 

o 

00 


<r 

H 

• 

o 






















W 

n- 

*H 

rH 

m 

00 

CO 

o 

r-~ 

m 

CM 

m 

00 

00 

ON 

rH 

00 

r*» 

CO 

00 

CO 

CO 

NO 

CO 

CJ 

NO 

rH 

<r 


<t 

CM 

00 

ON 

00 


00 



r- 

CO 

m 

CO 

NO 


X 

CM 

NO 

CO 

Q 

-co- 

rH 



CM 

rH 


m 


r^- 

rH 

<r 


co 

rH 

m 

CM 

rH 

CO 

CO 

CM 


rH 

Co 

s-/ 

•H 








rH 








«H 






PQ 


xi 






















PQ 



in 

o 

rH 

m 

CO 

ON 

mt 

CO 

rH 

NO 

m 

CO 

CO 


X 


NO 

m 

NO 

<r 

00 



CJ 






















H 

• 

o 

rH 

NO 

m 

co 

o 

CM 

NO 

m 


o 

00 

CM 

rH 

o 

00 

ON 

NO 

CO 


NO 

CM 

W 

ON 

X 


r» 

CM 

CM 

00 

o 

00 

ON 

00 

00 


oo 

CO 

NO 

CO 

X 

<r 

X 

CM 

NO 

CO 

O 

m 

rH 



rH 

rH 


NO 


r". 

rH 

mJ- 


CO 

iH 

in 

CM 

rH 

CO 

CO 

CM 


rH 

O 

-co- 

tH 








rH 








rH 







X 

PQ 


X> 

0) 

3 


G 

CM 

G 

ON 

rH 


m 

00 


CM 

f-"- 

rH 

<r 

in 

CM 


uo 

uo 

U0 

CM 

00 

ON 

CM 

o 

•H 

E-H • 

O 






















4-1 

W CM 

•H 

rH 

NO 

NO 

-d- 

O 

CM 

00 

o 

ON 


00 

00 

rH 

CM 

00 

f''- 


CO 

in 

NO 

rH 

a 

o 

rH 


f"- 

m 

CM 

00 

rH 

00 


00 

00 


00 

CO 

NO 

CO 

i"- 

<r 

x 

m 

NO 

CO 

o 

Q </> 

rH 



CM 

rH 


NO 


00 

rH 



CO 

rH 

m 

CM 

rH 

CO 

CO 

CM 


rH 


PQ 


X 

W 

X 

PQ 

C 

H 


>1 

P5 

H 

co 

X 

Q 

25 

X 


CO 

( 1 ) 


CO 

4J 

o 

3 

XJ 

O 

Ph 

Ph 

XJ 

O 

O 

Pn 

CO 

G 

o 

CU 

g 

cd 


CO 

<U 

X 

X 

4-1 

X 

a) 

H 

co 

G 

o 

<U 


cd 

>-< 

X> 

§ 


CU 

O 

CO 

X 

52 


XJ 

U 

O 

CJ 

a) 

Ph 

•H 




00 

X 

o 

co 

H 

rH 



cd 

rH 

CJ 

o 


<D 

u 

Pn 

u 

OJ 

o 

•H 


M 

cd 

X) 

<D 

CJ 

cd 

U 

CO 

cd 

00 

G 

> 

CO 

X 

X 

00 

Ou 

0 

cd 

<u 

•H 

o 

cd 

G 

a, 

CO 

CJ 

PQ 


H 

Ph 

0i5 

< 

• 

ON 

o 

rH 

CM 

CO 

'd- 

uo 

X 

rH 

CM 

CM 

CM 

CM 

CM 

CM 

CM 


>n 

U 

0) 

u 

CO 

X 

o 

a 

x 

XJ 

G 

cd 

CO 

<U 

X 

•H 

4-1 

X 

a) 

H 

XJ 

rH 

O 

X 

cu 

co 

G 

o 

X 


co 

Pi 

0) 

CJ 

•H 

cd 

■u 

c 

o 

CJ 

00 

CJ 

X 

X> 

G 

rH 

O 

X 

Pd 


CO 

4J 

o 

G 

X) 

o 

u 

tu 

X) 

CJ 

cd 

u 

0) 

X) 

e 

G 

X 


co 

V-t 

cu 

c 

•H 

cd 

4-> 

C! 


CO 

Pi 

0) 

CJ 

•H 

cd 

4-1 

CJ 

o 

CJ 

CJ 

<u 

XJ 

o 

o 

& 


0) 

Pn 

G 

4-1 

•H 

a 

2 

X) 

rH 

o 

<u 

CO 

3 

o 

PC 


n oo cn 

CM CM CM 



o 





CO 




CJ 





£ 









cu 




00 





4-> 




G 





M 




*H 









XJ 





4-1 




G 





<U 

CO 



X 





X 

4-1 



CJ 


00 


CO 

•H 

CJ 



X 


c 


a 

O 

G 



PJ 


•H 


•H 

H 

XJ 





X 


4-» 


o 





CO 


<u 

XJ 

u 



co 


•H 


X 

C 

P4 

00 


4J 


rH 


4-1 

cd 


G 

CU 

a 

CO 

X 


G 


X5 

•H 

u 

G 

>-l 

G 

co 

* Po 

00 

CU 

G 

G 

x> 

CU 

Oh 

rH 

X 

G 

•H 


u 

o 

G 


cd 


•H 

X 

X 

•H 

H 

•H 

XJ 

a 

XJ 

G 

X 

a) 

G 

Pl4 

cd 

G 

•H 

G 

cd 

< 

pG 

U 


4-> 

cd 

£ 

cd 

CU 



G 

X) 

G 


cu 


rH 

XJ 

£ 

Ph 

c 

O 

00 

X 

co 

CJ 

G 

G 


cd 

CJ 

G 

CJ 

a 


cd 

CU 

a) 



•H 


•H 

* 


rH 

o 



4-1 

o 

4-1 

CO 

4-1 

o 

•H 

cu 

CU 

G 

•H 

CO 

oo 

G 

J-4 

<4-1 

a 

CU 

•H 

CO 

cd 

G 

X 

4-1 

4-4 

cd 

cd 


cd 

rH 

Ph 

cd 

CU 

o 


P4 

p4 

X 

Ph 

© 

p4 

pH 

rH 

CM 

CO 

<1- 

uo 

X 

r^. 

00 

ON 

CO 

CO 

CO 

co 

CO 

CO 

co 

CO 

CO 


164 











TABLE 6 (continued) 

BUDGET A BUDGET B BUDGET C BUDGET E 
($42.2 ($59.4 ($67.6 ($93.6 

INDUSTRY billions) billions) billions) billions) 


ACDA/E-156 


CM 

o 

rH 

o 

o 

st 

rH 

CM 

vO 

st 

st 

CM 

VO 

st 

CM 

CO 

00 

CM 

00 

rH 

O 

04 

rH 

rH 

vO 

o 

rH 

CM 


st 

CO 

CO 

rH 

m 

rH 

O 


st 

00 

00 

co 

<r 

as 

00 

CO 

f"- 

rH 

00 

r- 

00 

si) 

VO 

vO 

rH 

m 

00 

00 


vO 

CT\ 

m 


cn 

rH 

<1- 

Os 

rH 

rH 

rH 


c 

CO 

st 

rH 

rH 

rH 


CO 

rH 

CM 


O 

o 

as 

o 

St 

Os 

o 

o 

st 

o 

o 

in 

00 

00 

vO 

rH 


CO 

rH 

OS 

CM 

st 


CO 

rH 

r- 

vO 

Os 

00 

vO 

as 

CO 

00 

CO 

CO 

o 


o 

CO 

rH 

00 

st 

o 

00 

st 

m 

o 

vO 

m 

00 

VO 

m 

m 

rH 

m 

00 

00 

m 


as 

m 


st 

rH 


Os 

rH 

rH 

rH 


st 

CO 

st 

rH 

rH 

rH 


CO 

rH 

CM 


vO 

vO 

n* 

m 


m 

CO 

o 

f". 

st 

O 

CO 

o 

CM 

rH 

00 

CM 


as 

CO 

rH 


CM 

CO 

rH 

rH 


m 

CO 

VD 

Os 

o 


CM 

st 

00 


CO 

CO 

00 

00 

st 

rH 

00 

st 

«n 

o 

vO 

m 

00 

sO 

m 

m 

rH 

•n 

r-s 

00 



00 

m 


st 

rH 

st 

as 

rH 

«H 

rH 


st 

CO 

st 

rH 

rH 

rH 


CO 

rH 

CM 


CO 

vO 

CO 

CO 

00 

st 

rH 

00 

o 

rH 


sD 

f-s 


as 

vO 

m 

o 

00 

m 

as 

m 

CM 

<3- 

o 

CO 

o 

m 

CO 

f"- 

vO 

CM 

rH 

r>» 

S3- 

S3- 

m 

Ov 

S3- 

00 

I-'* 

st 

CM 

00 

st 

CO 

o 

m 

S3- 

00 

vO 

S3- 

m 

o 

in 


00 

CM 

n* 

rs 

m 


<3- 

rH 

st 

as 

rH 

rH 

rH 


st 

CO 

st 

rH 

rH 

rH 


CO 

rH 

CM 














CO 




















4J 




















O 




















d 




















n3 





4-1 













rH 


O 





d 













c3 


3s 





<u 













H 

co 

P^ 





0 





CO 








a> 

4-J 




co 


CH 





u 








52 

O 

d) 



0) 


•H 





o 









d 

Vi 



d 


d 





d 








rH 


•H 



•H 


a* 





T3 








cO 

O 

0: 


H 

x: 


w 



CO 


o 








u 

U 



d 

CJ 

H 


co 

<0 

u 


Vl 








d 

PH 



d) 

<g 

d 

n3 

d> 

<D 

o 


PH 








4-1 


co 


0 

52 

<d 

d 

d 

d 




CO 





CO 


O 

0) 

d) 


0u 


0 

cO 

•H 

•H 

-o 


H 

4-> 

CO 




rH 


d 

CJ 

> 


•H 

00 

a 


X 

X 

o 


0) 

CJ 

u 




CO 


H 

•H 

rH 


d 

d 

•H 

>> 

u 

a 

M 


xi 


o 




4J 


4-1 

X 

cO 


CJ 1 

•H 

d 

Vi 

3 

eg 

P_i 


4-> 

X 

a 




0) 


CO 

U 

> 

co 

w 

d 

cr 

d) 

52 

X 



<0 

o 

-0 




52 



jo 


d) 


•H 

w 

d 



o 


<D 

u 

o 









d 

T3 

52 



rH 

rH 

•H 


X 

pH 

H 




CO 


00 


00 

•H 

d 


00 

X 

cO 

cO 

4_) 




PV 




d 

CO 

c 


c: 


CO 

T3 

d 

o 

•H 

♦H 

(0 

00 

u 

CO 





o 

u 

•H 

<D 

•H 

Vi 


d 

•rH 

cO 

Vi 

Vi 

03 

c 

<D 

CO 

pn 

rH 



Vi 

0) 

X 

H 

u 

d 

>> 

cO 

rH 

52 

4-1 

H 

rH 

•H 

x 

cc3 

cO 

0) 



M 

c 

0 

O 

CO 

H 

Vi 


nj 


CO 

CO 

Oh 

Cj 

u 

rH 

rH 

a) 



<13 

*H 

d 

CO 

rH 


d) 

d 

d 

00 

d 

d 


rj 

o 

o 

o 

4-1 



Ph 

CO 

rH 


PH 

T3 

d 

o 

cO 

d 

T3 

TJ 


cO 




CO 



1 

4-> 

Ph 

n 


d 

•H 

•H 

32 

•H 

n4 

d 


H 

T3 

no 

T3 




e 

C 


CO 


cO 

,d 

H 


x 

M 

M 

oj 


c 

d 

d 

-a 


0 

o 

O 

* CO 

00 

0) 


a 

O 

rH 

u 




H 

cO 

Cfl 

cO 

a 


3 


CJ 

00 4-1 

c 

Vi 

CO 

co 

d 

cO 

o 

rH 

rH 

u 

Q) 




cO 

Vi 

d 



d o 

•H 

CO 

d) 

X 

Vi 

•H 

£ 

cO 

cO 

rtl 

jC 

CO 

CO 

d) 


a) 

•H 

M 

rH 

•h d 



d 


4J 

Vi 

rH 

•H 

Vi 

rj 

4_J 

d) 

CO 

d 

d 

cu 

6 

0) 

<3 

4-1 TJ 

E 

nd 

•H 

£ 

CO 

03 

CO 

CJ 

d) 

X) 

o3 

o 

cO 

o 

o 

Dr 

d 

X 

4J 

co O 

cO 

Vi 

00 

Vi 

d 

4J 

4-1 

dJ 

d 

H 

d) 

XX 

rH 

4-> 

M 

o 

rH 

4-» 

0) 

a) m 

H 

cO 

d 

cO 

o 

is 

d) 

CV 

<u 

p2 

X 

CO 

o 

CO 

M 

cj 

< 

O 

52 

33 Ph 

CO 

33 

w 

pH 

CJ 

52 

52 

C/3 

O 

• 

o 


CM 

CO 

st 

m 

SO 


00 

a> 

o 

rH 

CM 

ro 

St 

m 

vD 


00 

ov 

st 

s3- 

<r 

<3- 

St 

<3- 

St 

st 

St 

St 

m 

m 

m 

m 

m 

m 

m 

in 

in 

m 


165 








ACDA/E-156 



W 


^~s 

rH 

<r 

<r 

X 

00 

rH 

00 

iH 

ON 

CO 

o 

<r 

X 

o 

ON 

rH 

n- 

X 

rH 


H 

vU 

• 

c 

o 

• 

in 


00 

CM 

CO 

n- 

CO 

<r 

X 

OS 

CM 

X 

X 

o 

rH 

CM 

ON 

ON 

00 


W 

CO 

X 


CO 

CM 

rH 

X 

CM 

rH 

o 

rH 

rH 

O 

CM 

00 


o 

ON 

X 

co 

t"* 


O 

a\ 

rH 

CM 

CO 

rH 

in 

rH 

CM 

00 

X 

X 

00 


<r 

CM 

rH 

•<r 

00 

f"- 

rH 

CO 


Q 

</> X 
















CM 







•H 





















PQ 


XI 





















CJ 


s 






















X 

g 


CO 

on 

On 

X 

CM 

CO 

o 

rH 

CO 

m 

CM 

CM 

<r 

ON 

00 

1-". 

in 

CO 


H 























W 

r^. 

X 

m 

CO 

o 

X 

X 

CO 

OS 


r- 

CO 

o 

00 

00 

o 

mT 

ON 

X 

rH 

<r 


O 

X 

rH 

o 

CM 

CO 

ON 

X 

CM 

o 

Os 

rH 


Os 


X 

r"~ 

rH 

o 



oo 


Q 

</> 

rH 

CM 

CO 

tH 

<T 

rH 

CM 

X 

<T 

rH 

00 

<r 

CO 

CM 

rH 

<r 

ON 


rH 

CO 


GJ 

>—✓ 

•H 
















CM 





PQ 


X 





















PQ 


^~N 

<r 

m 

CM 

X 

CO 

O 

00 


r- 

CO 

rH 

00 

CM 


CO 

<r 

o 

r^- 

r-'- 



<* 

g 





















H 

• 

o 

m 

o 

rH 

rH 


CM 

<* 

Os 

X 

00 

Os 

o 

CO 

ON 

00 

X 

00 

rH 

in 


W 

ON 

H 

ON 

CM 

CO 

Os 

X 

CM 

X 

X 

rH 

'd- 

CM 

X 

X 

X 

rH 

o 


sf 

00 


O 

in 

r—1 

rH 

CO 

rH 

<t 

rH 

CM 

X 


rH 

00 

<f 

CO 

CM 

X 

<r 

Os 

r>- 

rH 

CO 


Q -o> X 
















CM 





G) 

'w' 

•H 





















PQ 


X 











































X 























G 























G 

<3 


/'-n 




















G 


CN 

g 

r^> 

r- 

<t 

X 

X 

00 

CM 

CM 

tH 


CO 

CM 

rH 

CO 

X 

CM 

rH 

in 

n- 
























4-> 

W 

CM 

*H 

CO 

<fr 

CO 

X 

00 

00 

cn 

CM 

X 

X 

m 

ON 

rH 

X 

Mf 

oo 

ON 

rH 

r^- 

G 

O 


rH 


rH 

tH 

r>. 

X 

rH 

f". 

CM 

rH 

X 

ON 

rH 

n 

X 

CM 

00 



00 

o 

Q 

</> 

iH 

rH 

CO 

CO 


rH 

CM 

<r 

<r 

rH 

00 

CM 

CO 

CM 

rH 

<t 

00 


rH 

CO 

a 

GJ 


•H 
















CM 





PQ 


X 




















X 























w 









X 























G 




V 










PQ 









CL) 



rH 











< 









g 



G 






CO 





H 









CL 



CJ 



CO 


X 

X 














•H 



•H 



G 


C 

a 














G 



X 



X 


G 

G 









CO 





a 4 



X 



CJ 


B 

X 














W 



o 



>> 


a, 

o 









o 

CO 


CO 





G 



CJ 


•H 

X 









g 

a) 


G 


00 



rH 





G 

P-4 









g 

G 


4-J 


c 



w 



X 


a 4 










G 

•H 


G 


•H 






G 


w 

X 









tH 

X 

CO 

X 


X 



G 



G 



G 









iH 

CJ 

0) 

G 


X 



c 





o 

X 









0) 

03 

G 

C4 


32 

X 


X 



CO 


•H 

G 








ps 

a 

£ 

•H 

a 



G 


00 



X 

CO 

X 

X 



00 





H 

CO 


X 

<3 


X 

G 

co 

G 



G 

X 

a 

CJ 



c 





CO 

•H 

00 

CJ 


C0 

C 

B 

X 

W 



rH 

a 

G 

G 



•H 





X 

£ 

G 

cd 

X 

G 

G 

Ph 

G 




•H 

o 

X 

X 



X 





Q 


X 

£ 

G 

CJ 


•H 

g 

<-3 


CO 

G 

rH 

00 

G 



CO 

U) 




2 

X 

4-1 


G 

G 

00 

G 

C 



X 

X 

o 

o 

G 



G 

G 




X 

a 

3 



G 

G 

a 4 

o 



X 

H 


X 

G 



a 

X 





G 


x 

CO 

•H 

•H 

w 

a 

G 


G 


X 

o 

X 



X 

X 






£ 

x > 

X 

rH 

X 


E 

05 

CO 

Oh 

n 

G 

X 


G 


G 

X 





CO 

o 

CO 

o 

a 

X 

c 

o 

1 

G 


CO 

G 

cx 

CO 

O 

C 

o 

rH 





Cu 

X 

G 

4-J 


00 

o 

o 

X 

rH 

X 

G 



G 

•H 

o 

X 

X 





o 


X 

o 

<3 

X 

•H 



CJ 

G 

•H 

CO 

X 

O 

X 

X 

PQ 

X 





X 

X 

G 

£ 


X 

X 

o 

* 

•H 

G 

G 

X 

G 

G 

G 

X 







CO 

G 

M 


X 


G 

•H 

CO X 

X 


X 

C 

G 

G 

X 

G 

> 







G 


o 

rH 

a 

a 

G 

G C 

G 

X 

H 

G 


G 

X 

CJ 

H 

CJ 





G 


G 

X 

o 

X 

•H 

O 

•H G 

> 

4-4 


B 

rH 

rH 

O 

X 


X 





g 

<1) 

CJ 

X 

X 

X 

G 

X 

x e 


G 


G 

G 

rH 

Pu 

G 

* 

X 





•H 

CJ 

•H 

X 

<D 

X 

3 

X 

G X. 

X 

X 

CO 

X 

CJ 

G 

CO 

G 

o 

X 





X 

•H 

> 

O 

CO 

a 

S 

CJ 

X X 

o 

CJ 

a. 

X 

•H 

CJ 

G 


X 

a 





CJ 

4-1 

X 

G 

G 

G 

§ 

G 

x G 

X 

X 

•H 

CO 

X 

CO 

G 

n 

X 

G 





G 

4-1 

G 

rH 

O 

rH 

o 

rH 

G a 4 

o 

•H 

X 

c 

cx 

X 

X 

o 

G 

rH 





£ 

o 

CO 

w 

X 

w 

CJ 

w 

PQ W 

£ 

<3 

CO 

X 

o 

£ 

H 

CJ 

05 

w 


oxcMcovj-inxr^.00 ONoxcMco^inxr^oooN 
xxxxxxxxx 


166 


Utilities 226.4 228.3 228.8 227.6 









ACDA/E-156 



















w 


CO 

o 

CO 

ON 

NO 

rH 

O 

O 

NO 

ON 

U0 

CM 

O 

o 

o 


nO 

c 

• 













• 

H 

• 

o 

CM 

ON 

rH 

CM 

CM 

O 

o 

UO 

uo 

<r 

o 

o 

o 

o 

W 

CO 

•H 

uo 

CM 

UO 

<r 



O 

uo 

ON 






o 

ON 

rH 


rH 


CO 

rH 


U0 



ON 

uo 




a 

<73- 

i—i 


NO 

CO 


CO 

rH 



00 






do 


•H 


rH 













PQ 


rO 

















/'“N. 















CJ 

NO 

CO 

d 



CO 

CO 


CM 

ON 

<* 

NO 

CM 

rH 

o 

o 

o 

H 

W 

• 

r- 

o 

•H 

CO 

T—1 

uo 

o 

ON 


NO 

rH 

CO 

NO 

o 

o 

o 

o 

o 

NO 

rH 

uo 

nO 

ON 


00 

O'. 

rH 

rH 

ON 

NO 

CO 





</> 

rH 



UO 

00 

CM 


UO 

00 

00 

ON 

UO 




1—J 

N-/ 

•H 


NO 

CO 


CO 

rH 



00 






PQ 


»o 


rH 













PQ 


/^N 

CO 

r» 

CO 

CO 

CO 

CM 

CM 

rH 

<r 

NO 

CM 

NO 

o 

o 

o 

H 

• 

d 

o 

• 

CO 

CO 

•vf 

00 

00 

NO 

rH 

NO 

CO 

rH 

CM 

o 

o 

• 

o 

W 

ON 

•H 

uo 

<fr 

CO 


CM 

ON 

CM 

CM 

ON 


U0 




O 

m 

rH 


UO 

NO 

00 

CO 


U0 

00 

ON 

ON 

U0 




Q 

<j> 

rH 


NO 

_J 

CO 


CO 

rH 



00 







ZD ^ -H 
CQ J=> 


T? 

d) /-N 

d <! w 

a cm d 

•h h • o 

4J W M rl 

d O st iH 

O Q </> i—I 

O ZD ’ *H 

w PQ XI 


CM 

CM 

<r 

CO 

rH 


r-* 

CO 


CO 

ON 

o 

O 

o 

<* 


ON 

CM 

rH 

CO 

00 

U0 


ON 

NO 

O 

O 

o 

UO 

oo 

o 

ON 

o 

ON 

CM 

U0 

r-. 


uo 





NO 

r— 

00 



UO 

00 

rH 

ON 

uo 





NO 

CO 


CO 

rH 



ON 






vD 

W 

►J 

PQ 

< 

H 







CO 




CO 

4-» 




d 


co 

co 


CO 

•H 

0) 

d 


♦H 

O 

o 

o 


U 


•H 

•H 


& 

4-1 

> 

4-1 


d 

u 

d 


d> 

03 

d 

4-» 

CO 

4-1 

B 

CO 

•H 

d> 

d 

d 


4-1 

CO 

w 

•H 

u 

CO 

•H 


d 


CO 

0) 

a 

•H 

> 

<u 

C/3 

J-i 

<D 

2 


d 

TJ 

CO 

>-4 

H 


ctJ 

4-1 

d 

erf 

T> 

a 

a) 

d 


0) 

o 

d 

d 

d 

co 

d 


cfl 

4-» 

d 

a) 

T) 

a 

d 


TO 0) 

s a 


d 

Q< 

d 

erf 

TO 

§ 


d 

d 

o 

CO 

H 

0) 

d4 


co 

d 

CJ 

•H 

> 

d 

C/3 


CO 

0) 

a 

•H 

> 

M 

d 

C/3 

•H 

CO 

P, 

a) 

erf 

<u 


d 

o 

*H 

4J 

d 

d 

u 

Q) 

05 

TO 

d 

d 

CO 

4-» 


CO 

d 

o 

•H 

4-1 

<3 

O 

d 

TO 

W 


u 

& 

<1) 

4-1 

d 

w 

4 -> 

d 

§ 


d 

> 

o 

o 


4-» 

d 


d 

> 

O 

o 


d 

o 

o 

HJ 


<D 

4-> 

d 

w 

TO 

d 

co 


d 

> 

cO 

}-• 

H 


co 

d 

•H 


co 

rH 


4-1 


co 

•H 

d 



d 


CO 

C/3 


d 

d 

CO 

rN 

co 

rP 

d 

iH 

rH 

d 

CO 

CO 


r 

co 

o 

w 

CO 

d) 

Q 

e 

d 

d 


4-4 

d 

d 

H 

d 

d 


rH 

d 

B 

CD 

<_> 


d) 

V4 

d 

U 

d 

rH 

d 

rH 

d 

•H 

O 

CO 

•H 

dJ 

4-> 

o 

•H 

•H 

4-1 

o 

d 

d 

4-> 

CO 

4-> 

d 

T3 

T3 

d 

a 

CO 

14-4 

CTJ 



dJ 

O 

d 

d 

i 

d 

d 

4-1 

e 

d 

M-i 

& 


ph 

pd 

3S 

PQ 

< 

< 

s 

Pm 

C/3 

M 

PQ 

O 

o 

rH 

CM 

CO 


uo 

NO 


00 

ON 

O 

rH 

CM 

CO 

00 

00 

00 

00 

oo 

00 

00 

00 

00 

00 

ON 

ON 

ON 

ON 


167 


uppl 









1972 Interindustry Projections for Five Kaufmann Defense Assumptions - Sums 
(values in millions, employment in thousands, unemployment in percentages) 


ACDA/E-156 




f 


w 3 


E 

8 

a 


a 

CO 


co 

On 

a 

o 

o 

CM 

00 


*H 

B 

CO 

CM 

rH 

00 

o 

» 

e> 

«k 

a> 

o 

a> 

ON 


vO 

e 

r^ 

o\ 

«n 

00 

E5 

CA 

m 

ON 



U u 


u 

£ 


OQ 

& 


o 

o 


* 

o 

u 

5 


co cm <o 
cm sr m 
co ^ o 

Sk * * 

O' n* 

^ n 
m On 
<a 


o 

*4 

ax 


00 

00 

r** 

CM 

vC 

•> 

#k 

Sk 

O' 

Ox 

•H 

m 

a* 

co 

CA 

m 

ax 


ax 

*H 

sO 

CO 

00 

rH 

CO 

CM 

ax 

«k 

Sk 

Sk 

o 

m 

8 

H 

CO 

CO- 

NO 

Ox 


* s 


n cb ^ 

ca ai r». 

flk Sk Sk 

O Ok O 

ua o» <m 

u-> o\ 

</> 


<n 


<a r~ 

>t> ® 

r-» on rA 

• * * 

m on m 

<n O' Q 

kA O' 

</> 


a 

o 


V 4) 
o ® 

U 3 

Oh «M C 

NO 8 <3 

NO 

ON 


no r-' 
• • 
m co 
•h 
m 


2 


oo co 

sO 

m 


oo 


00 

m 


m 

a 

ac 

m 

r* 

m 

CM 

<r 

m 

m 

Sk 

Sk 

Sk 

m 


H 

rH 


m 

o 

CO 

CO 

<A 

NO 

ax 



CO 


O CO 
CO 

m 

«k 

<* 

00 


3 - 

m 

Sk 

CO 

00 


m co 


n <r 

a • 

00 vO 
4A 


CM 

00 


u 

5 t 

I I 


8 n <a 
oo 

nD n O' 


n .-i r> 

O' 00 On 

^ o 


</> 


o m 

S m cs 

rH O' 

•k Sk Sk 

co r- m 

O' O CM 


8 

m 


8 

>0 

r* 

'O 


8 

CM 

o 

NO 


r* 

nO 

oT 


ON 

m 

H 

s 

<A 


rH 


8 m co 

m 

^ *h ^ 


Ch 

m o 
r* 


s 


vO 

On 

sO 

CO 

5 

CO 

CM 


00 


m 

CM 

00 

H 

• 

Sk 

Sk 

Sk 

Sk 

•k 

Sk 

in 

rH 

#H 

2 

CM 

CO 

Ox 

CO 

CM 

CO 

<r 

CO 

Ox 


a 

u 

nH 

u 

O, 

<M 

On 


! I 

2 <3 


vO N 
a a 

m co 

rH 

m 


2 


Ox 

a 

o 

•-4 

00 

3 


m 

HT 

oo 

m 

Ox 

NO 

rH 

CO 

nA 

Sk 

Sk 

m 

r* 

ax 

<t 

O 

ax 

00 


o 



Sk 



rH 




lA 



a 

VO 

•H 


rH 

sO 

m 


CM 

m 

Sk 

Sk 

Sk 

Ox 

ax 


O 

ax 

00 


o 



00 

<r 

co 

CO 

a 

v£> 

3.9 

o 

m 

H 

CO 

s 

00 

00 

00 

CM 


© 

m 

CO 

CM 

CM 

CM 

00 

co 


N0 

rH 

o 

CO 

m 

Sk 

Sk 

ak 


Sk 

«k 

. 


r>k 

Ox 

00 

*4- 



n* 

NO 


m 

Ox 

CM 

00 


xO 

o 

Ok 

00 


m 

Ox 





o 



O' 

co 


8 " 
LA 

3 


sO 00 

a a 

3 - 

nA 

* 

P"l 

00 


•A «A 

CA 

nA 


3 


8 

m 

m 

CM 

a 

00 

m 

00 

lA 

CM 

rH 

OX 


Sk 

«k 

Sk 

m 

CM 


m 

«N| 

X* 

o 

* 

00 


M 


1! 

| f 

I <§ 


168 





ACDA/E-156 


national output totals in each industry. Both the national and regional 
models contain dynamic elements. In the national model, an industry*s 
investment is derived from the evolving output projections of the 
industry so as to maintain a consistent relationship between capital 
and output. In addition, the technical coefficients in the national 
model allow for changes in technology over time. The regional model is 
dynamic in that it can generate projections for a series of time 
periods recursively, using projections for one period as a basis for 
revised projections for future periods. 

The national projections are treated as inputs into the regional 
model, but a number of adjustments are made in order to match the two 
models. First, because the historical, trends in the regional industry 
location equations are based upon decennial population census employ¬ 
ment data, the Almon employment projections by industry are adjusted in 
order to conform to the census definitions of employment by industry. 

The difference between the reliability of national and regional 
data also requires adjustments in the format of the two models. The 
ninety-three sectors of the national model are aggregated into fifty 
sectors for the state projections model, since the close agreement 
between national interindustry data and state census data begin to 
decline if the data are disaggregated into more than fifty industries. 
For the same reason, the 50 industry classification is aggregated to 
20 industries for county and Standard Metropolitan Statistical Area 
(SMSA) projections. Therefore, even though projections could have been 
made in the special runs of the Harris model for this study at the 50 
industry level of detail for the states, the 20 industry classifica¬ 
tion was used, in order to permit direct comparison of SMSA and county 
projections with state projections. It must also be presumed that 
the more aggregated 20 industry projections for the states have a 
higher degree of reliability than would the 50 order projections.^ 

Also, both for reasons of budget constraints and display space 
limitations, only three of the five Kaufmann defense budget assumptions 


21 

Additional details concerning the regional projections model 
and discussion of work in progress to extend the model may be found in 

Curtis C. Harris, Jr., op cit . , and in a forthcoming article by the 
same author, ’’Forecasting the Location of Industries" presented before 
the Southeastern Regional Science Association Meetings, University of 
North Carolina, Chapel Hill, North Carolina, April 18, 1969. 


169 


/ 


i 




ACDA/E-156 


used in the national model were used in the regional model. The Budget D 
($70.5) and Budget A ($42.2) assumptions were dropped. However, both 
uncompensated and compensated versions of each of the three remaining 
budgets were included. 

The figures in Table 7 are those generated by the Almon national 
model. As already noted above, the Harris model was used to develop 
regional impact data for defense budgets B, C, and E ($59.4; $67.6; and 
$93.6 bil., respectively). There are certain conceptual and computa¬ 
tional differences between the Almon and Harris models which lead to 
some divergence in national employment totals and unemployment rates. 

For the purposes of this paper the Almon results will be reported as 
national findings. The Harris results are internally consistent, how¬ 
ever, and the sum of the regional data equal the corresponding Harris 
national totals. The above noted differences in approach lead to con¬ 
sistent differences in the two sets of national results as illustrated 
in Table 8. 


IV.1.4.3.b Impacts Upon States 

The estimates of the impact on employment of possible changes in 
the size and composition of defense expenditures in each state are 
shown in Table 9. Estimates for the United States total are included 
to provide a basis for comparison. 

Table 9 shows for each state the estimated total employment and 
rate of unemployment for 1972 under the three alternative assumptions 
concerning the size and composition of defense expenditures. Actual 
employment figures for 1965 are also included in order to indicate 
employment levels in each state before the major buildup for the 
Vietnam military effort. Two sets of employment estimates are given 
under each expenditure assumption, one assuming constant consumer 
expenditures with no compensatory increase in household spending as 
defense expenditures are reduced, and the other assuming that compen¬ 
sating consumer expenditures adjust sufficiently to keep national 
unemployment at a level of 3.7 to 3.9 percent. In the case of each of 
the three assumptions concerning defense expenditures, the uncompensated 
version indicates the maximum adjustment which would have to be made by 
the national and regional economies and the compensated version is 
intended to indicate a more realistic assessment of economic activity 
levels after some allowance is made for the likely adjustment of public 
policy. 

22 --— 

For purposes of this study the District of Columbia is treated 
as the 51st state. 


170 





Comparison of Almon and Harris 

Estimates of Employment and Unemployment for Three Defense Budgets 


ACDA/E-156 


u> 

•H 

u 

u 

3 

S3 


4-J 

3 

d) 

g ^ 
o 

T— I (D 


g* 

3 

3 

ZD 


3 

& 


uo 

CO 

00 

NO 

CM 

ON 

• 

• 

• 

• 

• 

• 


CO 

CO 

CO 

rH 

CO 


4-J 03 

3 T3 

o 

O 

o 

o 

3 3 

• 

• 

• 

• 

g 3 


CO 


nO 

>> 03 


CM 

CM 

CO 

O 3 

ON 

00 

nO 

oo 

rH O 


* 

#> 


O. JZ 

ON 

o 

o 

O 

B 4-J 

W 

c-* 

00 

00 

oo 


4J 

3 

3 v 

B ^ 

v -' 

o 


3 


d) 

3 

!o 


3 

4-1 

3 

Pi 


oo 

• • 

<3- CO 


on 

• • 

CO CO 


4-1 03 

3 X) 

NO 

<3- 

CO 

m 

3 3 

• 

• 

• 

• 

g 3 

<r 

o 

NO 

<3- 

>N 03 

oo 

CO 

CM 

m 

O 3 

m 

m 

CO 

m 

rH O 


* 

#N 

r\ 

Q- -C 

CO 




B 4_> 

w 

00 

oo 

00 

CO 




3 

rD 


3 

TJ 


o 

3 


O 

d) 


*H 

4-J 

XJ 

•H 

4-J 

x> 

rH 

3 

3 

rH 

3 

3 

rH 

03 

4-J 

rH 

w 

4-J 

•H 

3 

3 

•H 

3 

3 

JO 

3 

03 

JO 

3 

03 


o< 

3 

vO 

Or 

3 

<1- 

g 

3 

g 

3 

• 

o 

& 

• 

O 

Q 

ON 

o 

g 


O 

B 

m 

3 

O 

NO 

3 

O 

</> 

35 

CJ 

</> 


CJ 

N-J 



N-J 



CQ 



CJ 



4-J 



4-J 



3 



03 



00 



00 



X) 



XJ 



3 



3 



PD 



CQ 




171 


Budget E ($93.6 billion) 

Uncompensated 86,810.9 1.1 82,857.0 

Compensated 84,515.6 3.7 80,739.0 





ACDA/E-156 



Os 

<r 

m 


H 

m 

cn 

m 

o 

H 

»n 

cn 

m 

O' 

8 

oH 

o 

CM 

-o 

m 


•H 

O' 

<n 

r>. 

O 

00 

cn 

H 

H 


© 

m 

co 


in » *H 
« N Irt 


SO O 
in so 


CO 


CM 

cn 


n -» 
« >• 


« m 


H H N 

r* cn »n g 

CM 


m CM 



H 

CM 

cn 


CM 

CM 

cn 

3!> 


CM 

«n 

CM 

O' 

H 

O' 

cn 

CM 

m 

O' 

O 

00 

H 

CM 





H 


rH 

•■M 


CM 


s© CM CM 

os cn 


in cm cm 

cn cn 


O H » 


cn 


O' 

cn 


*n 


cn cm os <o os 


co 

CM 

00 


«-C CM 

S 2 


CM 


iO 

CM 

H 

r^ 

H 

cn 

o 

o 


CM 

oo *n 

cn 

o 

stf 

m 

o 

m 

cn 

sO 

s© 

cn 

r*. 


m 

O *n 

.-4 


CM 


O' 

cn 

CM 

** 

SO 

O' 

cn 

CM 

'O 

o o 

O' 

H 

cn 

co 


H 



CM 

H 




CM H 


H 

H 


sC 

fO 


4T» CM 


SO 

<n 

§ 

00 


cm O' 
rH m o 

CO H fs 


oo cn 

• • 

co cn 


o 


<* 

CM 

V© 

o 

oo 


H 

cn 


cn 

«n 


00 

o 

c-~ 


8 


00 

CM 


m 

O' 

H 

•H 

cn 

r** 

CM 

r- 

CM 


O' 

r* 

«♦ 

m 


cn 

cn 

CM 


cn 

m 


CM 

CM 

CM 


CM 

H 


CM 

cn 

CM 

H 

m 


CM 

00 

o 

cn 


00 

O' 

cn 

m 


O' 

m 


cn 


>» 

OO 

-« 

OO 

(M 

CM 

~9 

sO 

CO 

m 

CM 

%r\ 

O' 

o 

<0 

oo 


r-4 



CM 




•* 

H 

1-4 



00 

cn cn 


<*> o ^ 

• • • • 

m cn cn 


CM 

« 

CM 


00 


cn 


O' 


*S^ 


O' '•* 
os cn 

vO <* 
00 


O' © »H CM 

Ox m 

00 CM CM <r 


s s 


m cn 
m r*. 
cn cm 


O' CM 
• • 
cm cn 


cm 

•H 

%f\ O' 
^ H 


O 'O 


cn oo 
o oo 


cm m 

a 8 


CM O 
• • 
cn .» 


Os CM 

s a 


m 

cn 


cn 

CM 

oo 

s 


Os -O 
CM o 


cm *n so 
m cm in 


ao 

•» 


os o oo <n r-c 

•m <n o O cm oo 


cn 


f. 


2 


CM 

o 

CM 

sO 

H 

sO 

o 

sO 

O' 

cn 

cn 

CM 

-* 

cn 


«» 

CM 

CM 

s© 

CM 

cn 


CM 

CM 


CM 

'O 

00 

cn 

Sl~l 


O' 

m 


cn 

«# 

CM 

CM 

mt 

SO 

00 

cn 

CM 

m 

O' 

—< 



CM 

H 



«r 

H 


SO «* 
CM 


o >o 
cn cn 


cn os 

3 £ 


CM 


m 


r~ co *» 
o m <n 


CM 

vO 


s© in 
•n -o 


•» •* 
cm m 


sn 

o 

S© 

CM 


•* 

s© 

4A 

<n 

<r 

cn 

w> 


cn 



so 

a 

CM 

m 

O' 

cn 

O' 

o 

OS 

CM 


a 

CM 

SO 

cn 

H 

O 


a 

o 

os 

>* 


SO 

cn 

4 

O' 


rv 


CM 

cn 


O' 

r-C 


sO 

cn 

00 

a 

CM 

m 

CO 

<n 

CM 

mt 

Os 

o 

00 

Ch 

r* 

H 




oo 




CM 

H 



•» 

rM 




O c- m 

Q CM O 

r-C c-t 


OS 

SO 


8 


co co 
m O' 
r>. so 
sO 


8 


v© 

CO 


8 


Os 

Os 


3 2 

m cm 


f> >t H 

cn f» so 

"35 


s S 


3 

CO 

¥ 

u 

5 


1 

■a 

3 


J3 

a 

3 


3 

o 

M 

*C 

w 

< 



i 

1 


o 

hi 


■3 4 c- 

sM CO sH 


3 - 

I I 


Jf 

3 


! 11113 i n i 

OfciOiaMMMMWM 


172 


Louisiana 1086 1295 4.7 1307 








TABLE 9 (continued) 


ACDA/E-156 



W Z 

<0 5 

a 

03 

0 


H 

CO 

o 

as 

CM 

H 

a 


03 

v£> 

»a 

30 

o 

•A 

a 

lA 

o 

ao 

✓“N 

c 

CO 

CM 

CO 

CO 

CO 


CO 

CO 

co 

A 

CM 

CO 

a 

CM 

CO 

•a 

CO 

CO 

CM 

CM 

•» 

0 

o 

• 























•H 

a h 























H 

« 























fH 

a 

a 


a 

CM 

O' 

MS 

uo 

CO 

M3 

*A 


CM 

rH 

m 

sa 

o 

ao 

CO 

CM 

03 

<T 

sA 

«H 

II 

o 

a 

a 

H 

o 

rH 

M> 

a 

03 

<* 

CO 

03 

03 

ao 

8 

*9 

CO 

CM 

CM 

ao 

o 

CM 

JD 

ST 

0 

CM 

CM 

CO 

00 

a 

CM 

lA 

CM 

CO 

03 

CO 

03 

CM 

o 

03 

as 

*A 

*9 

o 

MS 


rH 

CM 

CO 

•H 


•H 





CM 


a 

CM 


-r 



'T 


H 

• 

a 
















































v> 

“O P* 
























a» pq 

o 

rH 

CO 

0 

'T 

v£> 

CM 

o 

»A 

o 

On 

A 

00 

eo 

00 

s£> 

CO 

CO 

o 

0 

CO 

o 

o 

« 35 


CO 

CO 

CO 

CO 

CO 

CO 


co 

A 

CM 

CO 

a 

CM 

CO 

MS 

pi 

CO 

CO 

CM 

^9 

lA 

S3 

c* r> 























0 

8." 























s 

g 

0 

pi 

cr> 

H 

sA 


a> 

a 

m 

0 

CO 

co 

8 

O' 

o 

o 

lA 

rH 

o 

0 

CO 

CO 

CP 

o fU 

o 

a 

M> 

o 

o> 

rH 

»a 

a 

03 

0 

co 

ao 

•n 

8 

0 

CM 

CM 

CM 

a 

o 

CM 


c 2 

•9 

MS 

CM 

CM 

CO 

00 

a 

CM 

%n 

CM 

CO 

03 

CO 

03 

CM 

o 

03 

oo 

m 

<r 

o 


3 Q 


•H 

CM 

Cl 

rH 


rH 





CM 


a 

CM 


■O 



0 


H 


H 

CM 

ao 

03 

30 

a 

^9 

CO 

a 

<o 

rH 

3/1 

rH 

o 

o 

CM 

Cl 

ao 

rH 

O' 

CM 

■o 

9 

CO 

CO 

CO 

CO 

CO 

co 

<9 

co 

A* 

CO 

co 

• 

IO 

-o 

30 

n 

pi 

pi 

PM 

•o 

in 

o 

co 

03 

ao 

CO 

rH 

03 

30 

CM 

CM 

CO 

<o 

A* 

9 

n 

A 

lA 

CO 

pi 

rH 

o 

lA 

D 

*5 

A* 

ao 

00 

fH 

»A 

a 

03 

^9 

CO 

o 

O' 

o 

A* 

pi 

CO 

CM 


sD 


CM 

9 

v6 

CM 

rH 

CO 

00 

a 

CM 

3/1 

CM 

CO 

Q 

<*■> 

9s 

o 

CM 

o 

9s 

« 

3rt 


o 


rH 

CM 

CO 

rH 


rH 








CM 


-» 



•* 


•H 

* 

-9 

os 

rH 

ao 

o 

*9 

Os 

03 

<o 

CM 

A 

rH 

rH 

•o 

r> 

M» 

o 

CM 

o 

30 

CM 


•h co 


CM 

a 


sO 

o 


O 

8 

CO 

rs 

OS 

CM 


m 

rH 

>o 

PS 

rH 

m 


s; 

o 

o 


CO 

CM 

CO 

00 

o 



9 

o 


CM 

ST 

lA 

-T 

PI 

CM 

*A 

CO 

CM 

<8 

ao 

ao 

CM 

30 

CM 

co 

8 

«* 

rH 

rH 

CM 

rH 

03 

ao 

vO 


O 

CM 

CO 

rH 


rH 






CO 

CM 


*8 



** 


rH 


lA o\ 
CO N 


s 

>» 


m 

sT 

9s 

CM 

O' 

O 

rH 

o 

0 

0 

03 

30 

co 

0 

03 

0 

0 

0 

Cs 

CO 

CO 

CM 

CO 

CM 

CO 

CO 

A 

CM 

PI 

A 

CM 

CO 

m 

CM 

PI 

CM 

CM 

CO 

<o 

30 

CM 

A 

•A 

00 

A 

«A 

■9 

A 

03 

rH 

oo 

rH 

o 

co 

0 

30 

co 

A 

fH 

o 

rH 

0 

A 

O' 

ST 

pi 

« 

® 

Q 

ao 

0 

3 

CM 

CM 

03 

o 

CM 

CM 

-T 

ao 

A 

CM 

m 

CM 

pi 

8 

PI 

o 

O 

CM 

O' 

0 

m 

0 

CM 

CO 

H 


H 






ao 

CM 


0 



0 



0 

0 


» « <e « n 4 
^ (*> ^ 


» oo < 

co sr 0 


CM 


<0 4> O 4 

n oo 


m 


O ro 
vO •» 


1/1 

0 


Is N N 

co co «n 


ci 

o 

<» 


co 0 r» «n ® 

^ 0 fs 00 O 

<o N H n « 

n <h 


0 

0 


CM 


sO 

rH 

CO 

H 

CM 

0 

CO 

A 

03 

CM 

CO 

0 

Ps 

A 

9* 

0 

CO 

»A 

s 

03 

vO 

CO 

9s 

rH 

l-l 

CO 

CM 

*A 

CM 

co 

9V 

CM 

0 

rs. 

8 

CM 

8 

OS 

0 

«n 

0 


0 rs o O 

H N N 


0 »H 


"S3 

vD CM 


03 

CM 

rH 

A 

2 

0 

m 

0 

CM 

2 

8 

rH 

rH 

3648 

H 

CM 

686 

03 

0 

0 

0 

m 

rH 

CM 

«n 

CM 

CO 

O' 

0 

A 

rH 

CM 

« 

•M 

0 

co 


8 


•o 

0 

« 


« 

u 

o 


a 

a. 


« 

s 

a 

u 

« 

^ Cr 8 u o • ■ 

3 3 1 S “ s s 


«* • • 

•H « -H 

Mem 


t 

3 

8 


li 


« 

h 

f-4 

A 

• 


& s 

in 

m m 

1 3 1 


i i 

X * 


M 

O 

>* 

i 



173 


South Carolina *70 1016 5.6 1025 










ACDA/E-156 


7 



•o X 

0-4 

CM 


00 

•A 

CO 

CO 

CM 

CM 

«* 

*-*0 

w a; 

v£> 

CA 


IA 


n 

•« 


CA 

vO 

o 

a 5 











o 

« 












C H 











*H 

4) 











H 

a. 

r-4 

O' 

ft 

m 

a 

o 

o 


o> 



h a. 

iA 

r-4 

o 

a 

8 

CM 

sO 

O' 


x> 

5 2 


m 

ca 

<•* 

H 

<s 

m 

m 

H 

>o 

O w 


H 

-» 



CM 

H 


H 


• 

ca 












O' 












</> 

•a a. 












at x 


ca 

CT» 

o 

®i 

o 

<T 

CM 

CA 

00 


4J W 










• 



o 

a 

O 

sr 

'T 

CM 

O 

O' 

H 

'O 

U Ot 

kA 

vO 

m 

rM 

00 

kA 


00 


c £ 

CM 

kA 



H 

O 

CM 

kA 

<o 

s D 


H 

>» 



CM 

H 


H 


O' 

•A 


2 




r-t «M 




kA 

00 

H 

M> 

CM 

kA 

O' 

A 

ON 

CM 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

ir\ 

CM 

<T 

»A 

CA 

CA 


CM 

CM 

sO 


M> 

vO 

lA 

00 


f-4 

CM 

a 


•A 

CA 

CM 

O 

a 

O' 

© 

A* 

O 


CM 

kA 

CA 


H 

O' 

CM 

kA 

*£> 

H 


H 





H 


H 



vO 

o 

tn 

sO 

kA 

sO 

0-4 

o 

CM 

CM 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

«A 

CA 


•A 

CA 

CA 

lA 

r-k 

CA 

sD 


<9 

CM 

a 

m 

00 

qo 

00 

o 

CM 

CA 

*A 

CA 

H 

o 

A* 

oo 

O' 

a 

s 


CM 

»A 

CA 

*«■ 

•H 

o* 

*■4 

lA 

H 


H 




H 

H 





D 












G 












•H 












4i 












a 

& 











o 

*2 2 

CA 

a 

o 

sO 

CM 

<T 

o 

vO 

ao 

CM 

o 

4) W 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

w> 

u z 

*A 

CM 


m 

CA 

CA 

kA 

CM 

n 

vO 

G 

<9 5 











O' o 

© 











•H 

0 H 











U H 

4) 











3 rH 

P- 

lA 

O 

CM 

m 

O' 


<y 

CA 

O' 


vt 

6 Pa 

*A 


CM 

o 

A* 

00 

O' 

A 

o 


4 *o 

o £ 

CM 

kA 

CA 

-» 

H 

O' 

H 

kA 

v© 

H 


o O 


H 




H 

H 


*—l 



<fy *n (L 

w « g 

O 

vO 

o 

H 

cn 

O' 

O' 

00 

rH 

oo 

_ «j H 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

W O 2 


CA 

kA 

'O 


CA 

kA 

CA 

sr 

M3 

h 8 

“ V ►» 

. 










O a 











S & 











ft o 

CM 

CA 


H 

A. 

0-4 

CM 

A 

O' 

CM 

* O 

kA 

CM 

a 

o 

A. 

A 

00 

M3 

oo 


c 2 

CM 

a 


H 

O' 

H 

•A 

lA 


D 0 


•9 



H 



H 



in a 

O' 

CA 

O' 

o 

H 

H 

H 

CM 

kA 

O' 

l© p 

CM 

ft 


CM 

«* 

O' 

A 

rH 

k0 

H 

O' Q 

CM 

<o 

CA 


*A 

O 

kA 


H 

•H 3 


0-4 

fn 



H 

H 


H 



o 

« 

Q 

A 

u 

a 

<3 


at 

at 


a 

8 

H H SO 


3 -8 ! S 

at «i at -h 


tl. 

•a w h 
<h as -h • e« 
o 3 > e q 

a« 


> > 


8 1 
I I 5 I 


174 





ACDA/E-156 


The importance of Table 9 is that it presents estimates of how 
the employment impacts upon the national economy (as shown in the first 
row) resulting from alternative defense expenditures (as indicated by 
the column headings) would be distributed among all of the states. 

The lowest of the defense budgets examined is Budget B ($59.4 
bil.). It assumes a Vietnam settlement, strategic arms limitation, plus 
cuts in other existing programs and is presented here as a hypothetically 
minimum defense budget in order to estimate the maximum regional unem¬ 
ployment impacts that defense cuts of that magnitude might generate. 

Table 9 indicates that defense cuts to this level, if not compensated 
by increases in other expenditures, could result in a national unemploy¬ 
ment rate of 4.5 percent. Compensatory spending could reduce this 
unemployment rate to 3.5 percent. However, these unemployment impacts 
are not spread evenly across the nation, but vary widely in their 
impacts upon different states. Under the uncompensated version, unem¬ 
ployment is estimated to climb as high as 10.7 percent in Alaska, but to 
be as low as 2,4 percent in the District of Columbia. 

Another low defense budget is Budget C ($67.6 bil.), a 1965 base 
inflated in money terms to reflect approximate 1972 price levels. The 
uncompensated version of this hypothetical budget represents an extreme 
position in assuming that no increases occur in consumer spending to 
compensate for reductions in defense expenditures. Even under these 
extreme assumptions, as shown in Table 9, national unemployment rises 
only to 3.8 percent and this is reduced to 3.6 percent under the more 
realistic assumption that consumer expenditures rise to absorb 
unemployed resources released by cuts in defense expenditures. The 
compensated version of this defense budget can thus be regarded as 
generating a realistic type of economic adjustment situation for the 
nation and its regions. The entries in Table 9 under Budget C ($67.6 
bil.) columns provide an estimate of how the impact of this assumed 
readjustment would affect employment and unemployment in each state. 

A summary of this information is shown in Table 10 indicating those 
states which are estimated to face the greatest unemployment problems 
under these assumptions about changing defense expenditures, and those 
in which unemployment would be least serious. 


Heading the list of states estimated to encounter unemployment 
in excess of 5 percent is Alaska with unemployment of 10.5 percent. 

As would be expected, states which are heavily dependent upon military 
expenditures and which lack highly diversified civilian economies are 


175 


ACDA/E-156 


TABLE 10 

State Ranking by Unemployment Impact for Calendar Year 1972 
[[Estimated under the Defense Budget C ($67.6 billion), Compensated] 

For Selected States 

Unemployment Greater than 5.0% Unemployment Less than 3.1% 


Rank 

State 

Percent 

Rank 

State 

Percent 

1 

Alaska 

10.5 

36 

Alabama 

3.0 

2 

New Mexico 

7.9 

37 

Ohio 

3.0 

3 

Nevada 

7.1 

38 

Missouri 

3.0 

4 

Wyoming 

6.2 

39 

Maryland 

2.9 

5 

Hawaii 

5.7 

40 

Wisconsin 

2.9 

6 

North Dakota 

5.6 

41 

Indiana 

2.9 

7 

Utah 

5.6 

42 

Tennessee 

2.8 

8 

California 

5.5 

43 

New Hampshire 

2.7 

9 

South Dakota 

5.5 

44 

West Virginia 

2.7 

10 

Arizona 

5.3 

45 

Oregon 

2.7 




46 

Iowa 

2.7 




47 

Illinois 

2.7 




48 

Arkansas 

2.7 




49 

New York 

2.6 




50 

Pennsylvania 

2.5 




51 

District of 

2.3 





Columbia 



176 







ACDA/E-156 


most vulnerable to defense cutbacks just as they are the states which 
most benefit from defense buildups. However, even under the Budget C 

($67.6 bil.) assumptions concerning defense cuts, the only states which 
are estimated to face unemployment of 6 percent or more are Alaska, 

New Mexico, Nevada, and Wyoming. States with expected unemployment 
rates of between 5 and 6 percent are Arizona, South Dakota, California, 
Utah, North Dakota, and Hawaii. 

At the other end of the scale are states which are estimated to 
have minimal problems in adjusting to significant defense expenditure 
cuts. The estimate for the District of Columbia (here treated as a 
state) is only 2.3 percent unemployment because of stability of 
Federal employment, high labor force participation ratio, absence of 
a rural hinterland, and other special factors associated with the 
economy of the nation’s capital. However, as shown in Table 10 there 
are also 13 states for which the estimated unemployment rate with 
defense cuts would be less than 3.1 percent: Pennsylvania, New York, 
Arkansas, Illinois, Iowa, Oregon, West Virginia, New Hampshire, 
Tennessee, Indiana, Wisconsin, Maryland, Missouri, Ohio and Alabama. 

If an unemployment rate of approximately 3.0 percent is assumed 
to be a rate which reflects a minimum feasible level of unemployment, 
then these estimates suggest that even with significant cuts in defense 
expenditures, almost one-fourth of the states might face labor 
shortages, because of normal growth in the non-defense sectors of the 
economy. 

The significance of these estimates is their indication that the 
economic impact of the assumed defense expenditure reductions would be 
distributed very unevenly geographically with some states experiencing 
much more difficult readjustment problems than others. Moreover, the 
states having the most severe adjustment problems (e.g., with more than 
6.0 percent unemployment) are small in number and are among the least 
populated in the nation. However, even in heavily populated states 
with diversified economies where the overall unemployment impact from 
decreased defense expenditures is minimal when averaged over the entire 
state, some small areas within the state may be greatly affected. For 
this reason, it is important to examine the effects of expenditure 
reduction upon small, sub-state regions. 


177 


) 


ACDA/E-156 


IV.1.4.3.c Impacts Upon Metropolitan Areas (SMSA's) 

Just as reliance upon estimates for national averages may mask 
the economic readjustment problem of particular states and industries 
within them, use of state averages may conceal the magnitude of the 
economic impacts of changing defense expenditures upon smaller areas 
within states. The economic adjustment problem ultimately falls upon 
individuals and firms within specific locations. The unemployment 
resulting from the loss of a contract which might be almost unnoticed 
in a large state could cause severe economic distress in a small local 
area. It is therefore important to be able to estimate economic read¬ 
justment impacts for small areas, for example, commuting areas within 
which displaced workers could seek reemployment without having to change 
residential location. Unfortunately, however, the smaller the geo¬ 
graphic area for which estimates are made, the less reliable projections 
become. The combination of urgent need for small area projections and 
the inverse relationship between size of region and reliability of 
estimates leads to continuing efforts to improve the data and 
methodology available for regional projections. At the present time, 
the individual county is the smallest geographic area for which large 
scale economic projections are normally attempted. The regional pro¬ 
jections model developed by Curtis Harris, Jr., which is used in this 
study, does permit economic projections to be made for individual 
counties with estimates of employment for 20 separate industries. 
However, these county employment projections are based upon a number of 
assumptions and should be regarded as subject to higher levels of error 
than projections for larger areas like states and multi-county areas. 

An intermediate geographic area between the state and the small 
counties is the Standard Metropolitan Statistical Area, generally refer¬ 
red to as the SMSA. • The SMSA is an important economic unit because it 
usually consists of a metropolitan center with a surrounding residen¬ 
tial commuting area. Most SMSA's include one or more complete 
25 r 

counties. In this study" the impact of assumed changes in defense 
expenditures on employment has been estimated for each of the 219 
SMSA’s presented in Table 11. 


Except in New England, where the corresponding metropolitan 
economic areas or corresponding whole county is substituted for the 
SMSA. For a listing and description of all U.S. SMSA’s, see U.S. 
Department of Commerce, Bureau of the Census, Population Estimates . 
Series P-25, No. 371, August 14, 1967. 


178 






Standard Metropolitan Statlatical Araaa 

Employment Totals Estimated for Alternative Defense Assumptions, 1972 

(employment in thousands) 


ACDA/E-156 


oo 

o 

ON 

CA 

H 

04 

CM 


m 

*H CO 

O*. XA 

*H 

O' 

•H 


o 

o 

o 

r* 

00 


ca 

<r 

CM 

O 

H 

CM 

H 

>n 

S> 

H 

04 

H 

vO 


XA 


m 

N 

CM 

PS 




O 

rH 

00 

xa *h 

o 

c* 

•e 

Ox 


rS 

M> 

H 

ca 

M) 

CS 

>o 

H 

•* 

M3 

»A 

xA 

*y 

O' 

*H 


oo 

O* 

•n 

CO 

M3 

O' 

fv 

O 

H 

CM 

o 

Ox 

*y 

H 

ca 


04 


04 

H 

04 


SS 




m 


H 

H 

*H 

00 



H 



H 

O *f\ OO 

vO 

.0 

.0 

.8 

p- O O 

.0 

,0 

,5 

2 

i r\ 

CM 

sr 

m O 

rH 

o 

<a 

CM 

o. 

«n 

-S’ 

'O 

H 

CA 

H 

ca 

rH 

H 


xA 

XA 

CM 


CM 

00 

CM 

CA 

CM 

M3 

CM 

n 

•-I 

Ox 

«y 

sO 

Ox 

•H 

00 

ca 

S> 


XA 

M3 



04 

04 

xA 

00 

H 

xa 

Ox 

o 

N 

o% 

o 

rH 

CM 

04 

O' 


r-i 

CO 


CM 


CM 

*H 

CM 



O* 




S> 


rH 

H 

*H 

00 



H 



ca 

o 

Ox 



CM 


oo 

rH 

rH 

ca 

A 

O' 

CM 

CM 

O* 

CM 

o 

o 

u"i 

vy 

o 

m 

04 


ca 

00 

CM 

CM 

*A 

s> 

CM 

rH 

rH 

rH 

<A 

vO 

ca 

xa 

sr 

XA 

rH 

CO 

«n 


n 

00 

o 

rH 

00 

CM 

rH 

Ox 

CA 

CA 

rH 


Ox 

00 

o 


M3 

S> 

00 

CM 

*y 



xA 

•y 

OX 

rH 

CM 

XA 


oo 

xA 

Ox 

M3 

S 


o 

*H 

CM 

O' 

OX 

4 

rH 

CA 


CM 


CM 

rH 

CM 



sO 





r~i 

rH 

rH 

p* 



rH 



*y 

CA 

»A 

vC 

00 

rH 


•H 

rH 

CM 

sr 

S> 

M3 

rH 

rH 


CM 

o 

o 

CA 

CA 

o 

xA 

CA 

lA 

CA 

CO 

CM 

CM 

M3 

S3 

04 

rH 

rH 

CM 


M3 


xA 

<r 

m 

CM 

CA 

<*> 


CA 

CA 

OX 

rH 

S3 

iA 

rH 

00 rS 

CM 

06 

3 

sr 

r~ oo 


xO 

>0 

00 

rH 

CA 

r^. 

m 

iA 

CA 

Ox 

<H 

rH 

xA 

^ 2 

xA 

O' 

r* O' 

rH 

CM 

O' 

Ox 

-y 

rH 

CA 


CM 


CM 

H 

CM 





in 


rH 

rH 

r» 



rH 



CM 

Ox 

00 

•y 

CA 

CM 

rH 


CM 

CM 

CM 

sr 

O' 

rH 

CM 

lO 

CM 

O' 

oo 

sr 

CM 


xA 

rH 


CA 

oo 

CM 

CM 

xA 

S3 

CM 

rH 

rH 

rH 

CA 

S3 

«n 

XA 

CA 

•o 

rH 

m 

CM 


CA 

00 

o 

rH 


CA 

rH 

Ox 


CM 

rH 

m 

rH 

Ox 

g: 

XA 

M3 


00 

CM 

«» 


xA 

xA 


Ox 

rH 

CM 

xA 



xA 

OX 

vO 

rH 


rH 

CM 

Ox 

Ox 



CA 


CM 


CM 

rH 

CM 



M3 




M3 



rH 

rH 




f-l 



O' 

xA 

CM 


rH 

o 

CA 

Ox 


oo 


00 


<c 

so 

oo 


sr 

CM 

xA 


PS 

xA 

CM 

XA 


oo 

CA 

CA 

xA 

S3 

CM 

PS 

rH 

CM 


s> 

cn 

m 


m 

CM 

>e 

CA 


CM XA 

3 

M3 


rH 

o 

00 o 

rH 

90 

^y 

m 

00 

oo 

HT 

XA 

in r* 

CM 

cm 

xA xA 

00 

rH 

CM 

m 

r» (~- 

«A 

xO 

s 


O' 

rH 

CM 

CO ox 

HT 

rH CA 

CM 


CM 

rH 

CM 


S3 






rH 

rH 



rH 



P» O PS rS 
rO \0 

N N 


o s> S' 'O 
O O' -r s> 


3 


n ^ in >o n 

m m vO 00 O' 


O « tt O N 

O' oo «*» o «•» 

O H 


8 

»- 

S 


S' 8 

£ g 

e u 5 

» -HO* 

! 5 | I S 

. 6 s # sr 

« • i * 

11111 

3 3 3 4 3 


• 

Z 

I 

• 

« 

P- 


§ 

w 

a 

* 

v 


2 


a 

« 


3 


3 




a 





179 









ACDA/E-156 



*s £ 

o< 

kO 

kO 

<n 

m 

o 

o 

*n 

kO 

n 

rH 

m 

"O 

rH 

<n 

CA 

o 

oo 

oo 

kO 

CM 

<o 

Ok 

<© 

«• 

/*■> 

fl 

U X 

* 5 


•A 


St 

CM 

<*> 

on 

an 

CA 

CA 

rH 

kA 

st 

rH 

kTl 

rH 

CM 

CA 

*n 

kO 

•n 

00 


n 

«n 

5 

v« 

S M 


























H 

3 

h 

o 

CM 

a 

CM 

o 

7 

A 

7 

<7* 

On 

a 

7 

00 

CM 

8 

CM 

00 

8 

70 

57 

on 

CM 

84 

k© 

kO 

IA 

rH 

rH 

85 

s 

cm 

oo 

£ 

kO 

st 

•A 

O 

3 

s 

■* 

2 

x> 

5 2 


CM 



CO 

CA 

H 


St 

rH 



rH 


rH 

rH 

lA 

a 


rH 

rH 

CA 

rH 


u Q 





H 












CM 









k£> 

• 



























rO 



























Ok 



























<o 

•o Pa 
4) S 

o 

Ok 

o 

O 

kA 

CM 

CM 

a 

O' 

00 

o 

Ok 

rH 

o 

in 

o 

CA 

7 

kO 

kO 

m 

o 

o 

CO 

o 

M 

* £ 


ca 


CA 


H 

a 

CM 

rH 

•H 


r» 

CA 


r* 



rH 

rH 

«n 

CA 

A 


rH 

CH 

la 

c 

r 

ca 

CA 

rH 

GO 

7 

a 

rH 

rH 

kA 

CM 

CM 

a 

rH 

kO 

rH 

00 

On 

CM 

lA 

rH 

eo 

a 

Ok 

k© 

a 


a p- 

CM 

CA 

7 

7 

7 

m 

CA 

UA 

ON 

CA 

A- 

lA 

CA 

oo 

a 

rH 

kO 

CM 

o 

o 

iO 

o 

oo 

O 

>0 


a 2 

rH 

CM 



7 

(A 

rH 


st 

rH 



rH 


rH 

rH 

o 

4A 

ec 

•H 

rH 

rH 

CA 

rH 

n£> 


d Q 





•A 












CA 










•o X 

ao 

CA 

00 

«A 

m 

NO 

o 

o 

kO 

a 

rH 

CA 

Ok 

Ok 

st 

a 

O' 

rH 

CA 

«» 

-7 

CM 

o 

o 

CD 


V □ 

























• 


4J X 

r-t 

nO 

rH 

st 

CA 

CA 

On 

kA 

7 

ST 

CM 

k£> 

7 

•H 

«A 

rH 

CM 

st 

sr 

A* 

kA 

Ok 

CM 

*7- 

CA 

c 

o 

S 13 



























a h 



























8. 

Ok 

o 

o 

a 

o 

nA 

Ok 

o 

7 

00 

o 

ST 

kO 

kA 

o 

A 

8 

00 

CA 

kO 

rH 

Ok 

On 

st 

<n 


Con 

EMP 

H 

3 

7 

7 

o 

7 

CM 

lA 

oo 

CM 

a 

UA 

CM 

oo 

a 

rH 

o 

00 

Ok 

~t 

Ok 

a 

O 

kA 

fi 

rH 



ST 

rH 

CA 

rH 



rH 



rH 


rH 

rH 

O' 

CM 

kA 

a 


rH 


CA 

rH 

n£> 




NO 

</y *T3 
w 0) 


00 


O' 


m m o o 


ca o O 7 


o N N N ^ N 


ia 7 


*A 



u « g 

rH 

NO 

rH 

-7 

IA 

CA 

O' 

CA 

sr 

*7 

CM 

-© 

kA 

CM 

4A 

CM 

CA 

7 

i» 

k© 

kA 

Ok 


CA 

CA 


H C 

M « X 

II 

oo 

Ok 

o 


Ok 

ST 

00 

Ok 

CM 

CD 

o 

a 

lA 

7 

Ok 

kO 

CA 

oo 

780 

k© 

rH 

o» 

k© 


kA 


* sg; 

rH 

rH 

CM 

CM 

st 

*7 

a 

a 

CM 

rH 

^7 

oo 

st 

CM 

rH 


CM 

rH 

00 

NO 

rH 

rH 

rH 

00 

Ok 

8 

Ok 

~t 

•H 

Ok 

nO 

CA 

O 

rH 

3 


3 Q 





rH 












CM 









A 



























■o 



























« 

& 


























9 

•o 2 


CM 

r- 

CA 

rH 

kO 

kA 

<7n 

00 


o 

CM 

r^* 

I s * 

CM 

k© 

ao 

o 

CA 

CA 

CM 

CM 

Ok 

Ok 

A 

e 

« G 


























H 

4J 

rs 4J Z 

B • 5 

rH 

k© 

rH 

st 

CA 

CA 

Ok 

s» 

st 

7 

CM 

nD 

7 

rH 

«A 

rH 

CM 

-* 

>o 


«n 

Ok 

rH 

«n 

<n 

§ 

o » 

S C K 


























u 

rS Hi 



























rH CL 

00 

8 

o 


o> 

st 

o> 

Ok 

CA 

CO 

o 

7 

tA 

kA 

o 


o 

ON 

3 

kA 

o 

A- 

Ok 

3 

<n 


S|| 

rH 

st 

st 

Ok 

st 

CH 

st 

00 

CM 


kA 

CM 

00 


rH 

O' 

o 

Ok 

st 

On 

A 

kA 


rH 

CM 



CA 

rH 

«n 

rH 


st 

rH 



rH 

♦ 

rH 

rH 

ON 

CM 

kA 

f*. 


rH 


CA 

rH 

k© 


<r 


























b) 

• 


























rJ 

On 


























cq ia 

< O A3 


























H 

W S fi 

kA 

r-* 

kO 

r% 

CA 

CM 

rH 

CM 

k© 

m 

kA 

nD 

o 

o 

k© 


o 

kA 

ON 

r^. 

CA 

7 

st 

rH 

CM 


cq a z 

si: 

CM 

>© 

CM 

st 

■o 

st 

S 

kA 

kO 

kA 

CM 

NO 

«n 

CH 

kA 

CM 

st 

st 

7 

Ah 

»A 

Ok 

CM 

kA 

•» 


i § 

A* 

ao 

Ok 

A- 

CM 

8 

r* 

Ok 

CH 

<© 

Ok 

m 

st 

3 

ON 

k© 

CM 

CA 

CA 

kA 

Ok 

A 

kA 

CA 

A 


so o e, 

rH 

CM 

CA 

-7 

co 

CM 

<T 

A. 

CM 

N^5 

kA 

CM 

NO 

rH 

kA 

8 


On 

tn 

On 

A 

o 

7 


5 S 

rH 

CM 



CA 

CA 



'7 

rH 



rH 


•H 

rH 

ON 





«n 

rH 

NO 


S3 Q 





rH 












CM 









«A 

nO 


CM 

kA 

kA 

nO 

CA 

o 

o 

k© 

H 

7 

ON 

ON 

s 

rH 

rH 

CA 

CA 

7 

Ok 

rH 


Ok 

CM 

kA 

rH 

rH 

CM 



CM 

CH 

rH 



rH 



00 

a 


3 


cm m cn q op 

O m r» uS A 

•~i >© st r-s 

N 


o o* 


o o 

fi Ok 

co 



0 

M 

,3 

fi 

W 

£ 


i 

M 

* 

3 

4J 

o 

<2 

4 

5 


o 

• 

u 

o 


3 I 

U 


m 

3 


00 


IHi| 

(0 M CO « « 


oeo.fi 

fi <3 3 O 

° s. a 3 e 

* n 


o a s | 5 3 3 

ii ?1111 


O -H 


fca 

6 


6ouuu«S<3«Su«8 


/ 


180 


Dallas, Taxaa 










ACDA/E-156 


■a 


a « 

■2 cm 

3|» 


m 

o» 

V> -V 
w tt 

M « 

& !m 


is 


■o 

V 

^ u 

a * 

o « 

■H C M 

<-» s 

" I 

M3 


M3 

</> T» 
w V 
4J 

o a 

H S 

H « N 


o 

C 

3 


•O 

« 


g: 

■H 0 M 

3 


<r 

Os 

•n 


is 


ii 

«■ 

S a h 

B is 


to 
t4> _ 

S3 


N 


O' •* 

m m 
«h m 


S O 
CM 

•n r-C 


H 

o 

m 

H 

CM 



O 

m 

O' 

m 

>9 

H 

o 


H 

«n 

tO 

o 

CM 




r-4 

M3 

o 


co 

04 

•a 

m 

m 



H 







sH 






oo 

CM 

oo 

to 

m 

*A 

M3 

00 

«n 

■» 

M3 

«o 

M3 


H 

8 

N 

«0 

aC 

lO 

■9 

o 

ao 

oo 


O' 

O' 

O' 

to 

o 

r- 

•o 




H 

H 





•-e 

*»M 


*-4 

CM 



9 0 0 0 0 /14 

w mm 


<9 «n ao 

N N 


vO O 

<£ cm m 

CM CM 


•tOOOONNOiniAONinOHOO 

9 N 9 N H («l H H 


ovcMa3mrMr~c^f^o'»Hf^inomr^OMm>ooQ<M<o 

•OMsm-o cm inmo'in.«oooo' «ro'©r-c*nooo»nmM>m.-t 

r-»m mM<» MM CM CM M CM M CM CM 


<£>(90>r<CM.c9aom<«cM<M<MOOfMOm 

mM«-t»»M«rimMCMi^r-ip<i-tmcMM 

H H 

0'o>'-ci'>o0'ma0'0«0'0aoo'r-* 
m-»mmcMCMmoommooooO'» 

Mm Id H -J MM 


O M> «» CM vO rn 'O 

m ■o m m m m m 


O' O' CM 

m m m -o 


OCMinin0'CMCM0'C-~in'»'»0' M3 0\CMM>'»|M 

sOmMCM|MMCMM>9MMmM>9 


3 5 


opM'Oommao'CtMmcoeo^'O 
^ »n m ■ ‘ ^ ~ 


m 


cm cm m oo 


•° 3 S 


to 

00 

oo 

M> 

M3 

oo 

r^. 

H 

CM 

o 

lO 

o 

ro 

M 

•H 

■O 

H 

to 

to 

CM 

•H 

CM 

C* 

H 

PM 

o 

00 

*“4 

r* 

M 

*-4 

PO 

oo 


M3 

m 

O' 

*o 

-a 

•A 

m 

CM 

CO 

PO 

CO 

tO 

m 

o 

ao 

iH 

m 


»n 






H 

H 



GO 00 •» 00 O' 


r~ »n oo cm 


8 


8 S 


r- M3 o> 

>n O M3 

M CM 


fMmeoo'M-ocM'O'C'0 

»*<MCMMrCMM3M3CMCMC'. 


•OMCMO'-O-OCMO 

cMcM<9MCM<Mmmm<o 


SSSSSSSSSSSSSSSSSSSSSSSSS 

Mm rnM«» MM M CM M CM M CM CM 


CM 

to 

r>* 

M3 

CM 

to 

PO 

M3 

CM 

r-t 

*H 



CM 

CM 

CM 

M5 



»o 


H 

CO 

m 

H 

»-4 

m 

8 

>n 


m 

co 

CM 

«-• 

rM 



CM 

CM 

CN 

to 

CM 

M3 

CO 

m 

H 

m 

m 

H 

CM 

to 

o* 

M3 

CM 

a 

m 

M3 

CM 

CM 

rM 

CM 

o 

O' 



■o 

M3 


CO 

«* 

CM 

8 

35 

8 

IO 

CM 

8 

M 



CM 

CM 


I- f«» M3 -O 

25 " 


oo m _ 

O © O' m oo ■o 

5? m m 




at r* 


N H 



181 


Grand Rapids, Michigan 182 









ACDA/E-156 


•§1 
^ u * 

>a 

rs 

o 

•43 

CO 

rH 

•a 

co 

-a 

o 

Os 

s© 

00 

CO 

«n 

-a 

cn 

o 

o 

n 

o> 

sO 

rH 

SO 

4 

rH 

ST 

r-« 

m 

CM 


CM 

H 

vo 

CO 

rH 

H 

CM 

rH 

-a 

sO 

rH 

p* 

CM 

CM 

H 

rH 

IN 

CO 

«a 

CM 

H 

o S “* 



























■H C M 



























•-! & 

as 


a 

CM 

o 

H 

CM 

3 

m 

On 

co 

CM 

CO 


R 

§ 

<N 

WO 

CO 

so 

is 

rH 


sO 

sO 

ox 

3 *t! 

co 

wo 

CO 

CO 

r- 

•© 

CO 

00 

o» 

CO 

wo 

o 

00 

fs 

R 

-a 

<T 

-a 

CO 

H 


MD 


H 

H 


rH 

CO 

CO 



M 


rH 

CM 

CM 




rH 




rH 

rH 

© 



























ro 



























cy« 

03 Ps 

w <y S 


o 

rH 

H 

o 

o 

o 

OS 

CM 

o 

o 

CM 

© 

co 

o 

o 

to 

© 

CM 

o 

o 

00 

o 

CO 

o 

o 

Map 

CM 


rH 

H 




CO 




rH 



SO 


wo 







CO 



W S IK 



























u o. 

1 § 

Os 

CO 

rH 

W'i 

CM 

o 

wo 

o 

CO 

**H 

H 

o 

S0 


to 

rH 

wo 

00 

>© 

ers 

CM 

CM 

rH 

rs. 

H* 

P* 

3 U(4 

CO 

s/3 

CO 

CO 

00 

00 


r*s 

•© 

ON 

o 


wo 

© 

w0 

r* 

00 


rH 

-a 

wo 

^ar 

<* 

•4T 

CM 

rs 

c £ 



rH 

**H 


rH 

co 

co 



rH 

<r 


H 

CM 

CM 



W0 


rH 




rH 

rH 

s> £3 



























•o & 

00 

-a 

rH 

o 

ON 

00 

r- 


co 

<r 

CO 


Mf 

&s 

<r 

CM 

CO 


o 

© 

CO 

vO 

rH 

CM 

wo 

rH 


W 5*4 

^ aj 2* 

-* 

CM 

co 

CO 

rH 

rH 

CM 

m 

CO 

CM 

CM 

CO 

rH 

CM 

sO 

rH 

00 

rH 

CO 

CM 

CM 

CM 

CM 

>n 

rH 

rH 

C as © 
O 8} 



























■H B M 
—i t) 



























*i B- 

00 

CM 

© 

CO 

o 

xG 

WO 

wo 

rH 

Os 

p- 

00 

wo 

•43 

P 

3 

3 

•43 

p* 

00 

o 

CM 

40 

W0 

rH 

s/3 

si S & 

CO 

wo 

CO 

CO 

ao 

r-N 

wo 

wo 

WO 

CO 

Os 

CM 

wo 

© 

*sT 

r- 

R 

'3- 

W0 

<5- 

•a 

CM 


o a 



rH 

rH 


rH 

co 

co 

p* 



<r 


rH 

CM 

CM 




rH 




rH 

rH 

u S3 



























N*0 

• 



























rs. 

sO 

</>■ t3 Cu 

^ <w X 

<r* 

s© 

rH 

o 

a> 

rH 

rH 

p* 

wo 


p* 

00 

w0 


WO 

o 

CO 

fM 

o 

o 

p* 

© 

CM 

m 

rH 

CO 

E 



























o « z 

03 » 


CM 

CO 

CO 

rH 

CM 

CO 

wo 

CO 

cm 

CM 

CO 

rH 


s£> 

rH 

CO 

rH 

CO 

CM 

CM 

CM 

CO 

<r 

CM 


in g« 

o §■ 



























S B 

5! ° 

» y fe 

00 

CM 

R 

CM 

o 

CM 

rH 

wo 

o 

Os 

M3 

p* 

CO 

CM 

p* 

s 

CO 

W0 

o 

00 

Ox 

rH 

© 

in 

sD 

CM 

CO 

m 

« 

33 

fs 

WO 

wo 

-a 

CD 

GO 

tM 

U0 

© 

HT 

aj 

P* 

R 

Hf 

<* 

-a 

<o 

<r 

rH 

P* 

C £ 



rH 

rH 


rH 

«n 

CO 

rs 



<* 


rH 

CM 

CM 




rH 




•H 

rH 

3 S 





























M? 

CM 

Os 

P- 

CO 

00 

rH 

st) 

CM 

(M 

CM 

00 

m 

fM 


CM 

Os 

CO 

oo 

ao 

CM 

WO 

rH 

i-H 


© 


CM 

CM 

CM 

rH 

rH 

CO 

W0 

CO 

CM 

CM 

CO 

rH 

CM 

sO 

rH 

IN 

rH 

CM 

rH 

CM 

CM 

fw 

wo 

rH 

rH 


00 

CM 

o 

CO 

O 

r*^ 

rH 

CM 

CO 

Ch 

v© 

n- 

wo 

fs 

-a 


CO 

SO 

ao 

cy> 

rH 

CM 

40 

W0 

rH 


CO 

wo 

CO 

CO 

00 

rs. 

WO 

W0 

wo 

00 

Os 

CM 

wo 

o 

<t 

sO 

00 

n 

R 

Ht 

WO 

<r 


CM 




rH 

rH 


rH 

CO 

CO 

h. 





rH 

C4 

CM 




rH 




rH 

rH 


CM 

N 

CO 

CO 

-a 

o 

sO 

cc 

•43 

SO 

43 

CO 

>a 

rH 


o 

rH 

<? 

CO 

so 

fs. 

SO 


wo 

rH 

wo 

wo 

4M 

CO 

<*■) 

CM 

CM 

CO 

wo 

CO 

CM 

CM 

Hf 

CM 

CO 

<o 

CM 

rH 

rH 

CM 

CO 

CsJ 

CM 

CM 

CM 

WO 

r>l 

rH 


fs. CM Os 

rH 

00 >© 

P* 

o 

«o 

Ox 

wo 

<N 

HT 

sO 

•a 


O wo 

CM 

48 

Ox 

sH 

Ox 

Ht 

a 

Hf 

CO W0 CM 

C^l 

rs 

<r 

m 

«a 

00 

Ox 

<N 

wo 

o 

-a 

•43 

CO fs. 

R 


•a 

CO 

sr 

fs 

rH 

H 

rH 

co 

«n 

r» 



«a 


r-» 

P4 




rH 



rH 

rH 



rH 

*o 

Ox 

CO 

W0 

IS 

r-» 

CM 

00 

o 

m <43 

00 


rH 

CO 

«e 


CO 


O 

o 


M* 

R 

00 

Ox 

«o 

f" fs. 

sa 

GO 

•o 

00 

sO 



rH 

rH 


rH 

CM 

m 


33 



rH 

CM 


00 CM Q <0 WO CO rH 

lA n CO W H 

rH rH 



182 


i 


Lansing, Michigan 125 












ACDA/E-156 



n 

Os 


</> *Q Qj 

0 2 

w « 5s 




«• 











% 



>** 


rO 












CM 

•a 

40 

90 

n 

•A 


9 

r> 

lA 

CO 


<A 

o 

o 

r» 

m 

oo 

o 

-* 

o 


iO 

Ox 

4A 

N 

Wg 

r*. 

<r 

rH 

9 

CM 

CM 

co 

rH 

r-4 

x<0 

rH 

r-4 

<M 

** 

CM 

M 

CM 

CM 

co 

«• 

mt 

r-4 

rH 

g-4 

•9 

~T 







n 




















25 

156 

o* 

•» 

$ 

s 

3 

75 

131 

92 

2843 

o 

a 

82 

57 

$ 

CM 

ao 

120 

108 

53 

295 

477 

25 

513 

696 

156 

41 

83 






O 










o 

V2 










Os 

O' 

rv 

r-4 

On 

o 

rs» 

o 

o 

o 

m 

m 

o 

m 

m 

o 

o 

o 

<M 

o 

ao 

o 

o 


o> 

C* 

-<r 

m 

«* 

rH 

cn 



H 



<o 


rH 


H 



rH 


CM 

cn 





rH 





O/ 

TV 

© 


> 


> 




r- 

o 













26 

T9I 

51 

39 

<?S 

M7 

r*. 

nr 


•4T 

n 

rH 

98 

2962 

296 

85 

60 

70 

84 

nr 

04 

r-4 

111 

56 

303 

487 

26 

528 

714 

159 

CO 

M* 

86 


vO 

•cr 



r-4 

vC 

CM 

co 


CM 

rH 

rn. 

r> 

v£> 

rH 

r- 


sO 

oo 

M> 

o 

xO 

co 

rH 

sO 

CO 

xO 

vO 

vO 

in 

n 

rH 

<r 

CM 

r-4 

m 

CO 

co 

rH 

co 

co 

CM 

CO 

rH 


-» 

CO 

CM 

CM 

<*> 

<o 

ro 


iA 

-7 

39 

68 

M3 

m rH 

vO 

<Jy 

§ 

Mf 

Os 

o 

CM 

CO 

s 


xO 



m 

co 


cm m 



r*. n 

Os 

M> 

oo 

m 

A- 

00 

CM 

m 

Ox 

00 

CM 

i-M 

o 

m 

rH 




rH 


OO 

CM 





rH 

rH 


CM 



m 

r* 

*H 


r-4 


m 

in 

rH 

m 

o 

O CM 

co 

xD ON 

i-C 


<o 

o 

o 

00 

m 

CO 

oo 

sO 

CO 

xO 


o 

CM 


m 

o 

r- 

m 

co 


CM 

m 

co 

co 

CM 


CO 

CM 

<o 

CO 

st 

<r 

CO 

CM 

CM 

co 

•9 

■9 


m q n « oo 

cm xA <? <*X MJ 


>» vr o 

«•» r» rx 


CM <N 
o» CM 


s 


<Jxc*X00C*CMi-4<Jxc>9n©©.O,-4r-4»N* 

COOOiA'OOOf'iOu-lty'CGCSJrHOiO 

cm *h »-t cm <3 m n rt 


CM 

00 



Ox 

trt 

*> t) tL 
w » 8 



X0 

CM 


oo 

rH 

in 

o 

rH 

x£> 

CO 

rH 

x© 

CM 

sO 

ON 

•n 

CO 

m 

f^. 

m 

00 

vy 

rH 

o 

xrx 

CM 

xO 

xO 

XJ0 

<4 

CO 

rH 

M 

CM 

rH 


CO 

n 

rH 

CO 

CM 

CM 

CO 

rH 

>7 

Sf 

CM 

CM 

CM 

CO 

CO 

CO 



rH 
























*n 

a* 

<a 


s 

vO 

St 

rH 

«o 

sO 

s 



o 

CM 

CO 

s 

54 

Cv 

CM 

SO 

CO 

s 

09 

CM 

sf 

CM 

m 


CO 

-X* 


CO 

l?x 

xO 

CO 

m 

r- 

oo 

Cxi 

Os 

3 

!M 

rH 

a 

v? 

ao 








rH 


a 

CM 





rH 

rH 


CM 


m 




0* 

CM 

Ox 

o 

CM 

f** 

m 

« 

oo 

00 

o 

r-4 

<7* 

•O 

rH 

CM 

ON 

93 

rH 

rH 

mT 

00 



m 

ox 

m 

xC 

xO 


xC 

9 

CM 

9 

CM 

CM 

xO 


CO 

rH 

m 

CO 

CM 

fO 

CM 

tn 

«n 

C*> 

CO 

CM 

n 

CO 

4*3 

25 

158 

CA 

9 

s 

67 

m 

•* 

r- 

130 

ax 

Ox 

CM 

ce 

287 

83 

59 

$ 

82 

122 

108 

53 

a 

477 

26 

506 

695 

157 

CM 

Hf 

83 


N 



CNj 


r-.Qvor^cor'N'C^-i 

©x«#iAi/'xcn>oo* 


iA 

•A 


5Q 


« m •> h m « n 

<S « 4 * n » « 

CM 


! H s !8 




183 


HOBt|OM(7 











TABLE 11 (continued) 


ACDA/E-156 



•o £ 

r* 

ON 

vD 

O' 

CM 

CO 

rH 

CO 

oo 

oo 

rH 

ON 


00 

O' 

CM 

rH 


co 


o 

ON 

ao 

r* 

rH 

0) W 
^s*J Z 

CM 


•H 



sf 

*> 

CO 

rH 

CO 

NO 

CM 


CM 

rH 

m 

CM 

CM 

NO 

rH 

CO 



rH 


a aj 5 


























Q U3 


























•HCH 


























rH a. 

NO 

NO 

CO 



o 

rH 

vO 

o 

-4- 

CM 


co 

CM 

o 

o 

«A 

CO 

ON 

CO 

CO 

o 

-4 

o 

rH 

H Q Q, 

>3r 

1A 

CM 

in 

H 

o 

o 

o 

wv 

CO 

CM 

CO 

A 


-j- 

xO 

« 


o> 

CM 

vO 

rH 

n 

A 

»n 

|C 0 I 



CM 


CO 

r-C 


o 

r*. 

rH 

CO 



CM 

CM 

rH 

rH 

m 


rH 

O' 

'j 


00 


u fi 








m 













•H 






© cm © O 


VO o «» 

CM 

O' 

ON vO 

O A A 

00 

os 

o o *c o «» o 

CM 

CM 



CM 

CO 


CM 


r* 

00 

00 

Hf 

CO 

ON 

m 

vO 


rH 

m 


o 


00 

vO 

NO 

o 


H* 

CM 

CM 

m 

m 

CM 


CM 

O 

rH 

CM 

o 

CO 

co 

co 

in 

r*. 


Ni3 

ao 

00 

o 

CM 


CM 

CO 



CM 

rH 

CO 

rH 


CM 

00 

rH 

co 



CM 


rH 

rH 

m 

rH 

rH 

o 



00 







in 


















00 

m 


CO 

r«- 

>0 

CO 

CM 

m 

<T 

rH 

CM 

CO 

OO 

rH 

rH 

CO 

'O 

<T 

CM 

sO 

00 

CO 

<1- 

CO 


Hf 

rH 

CO 

rH 


CM 

rH 

«n 

<r 

CM 

CO 



CO 

to 

CM 

CM 

HT 

in 

CO 

nO 

CM 

CM 


rH 

CO 

CM 




in m sr 

in CM n- 

CM rH 


<r vO 

rH O 

co 


rH 


co 


vC 
CM \C 


co cm 


CM <7 n 

m m 


so 


0^ tA VA 

m cm u-v 

CM rH 


rH 

co 


Ch 


3 


m 


sO 


m rH 
CM CM 


On CM 

m 


m so m co ^ 

m CM r- «H a\ 

n h n 


CO 


CO 

CM 


o* o r* 

CM CO rH 


^ M 3 
o >t 


m co cm o co 

m cm r* o os 

CM rH CO 


m 

CO 

On 

On 

m 

CO 

r>» 

o 

co 

00 

CM 

o 

co 

in 

NO 

<T 

rH 

r* 

rH 

fO 



CM 

CM 

m 









CO 

00 

Os 

Hf 

in 

Ch 


CO 

CO 

<f 

in 

CO 

-O’ 

CM 

CM 

*n 

o 

O' 

co 

HT 

co 

A 

o 

m 

00 

CM 

o 

co 

m 

X> 


o 


*-H 

co 



CM 

CM 

in 








o 

CM 


00 

o 

rH 

CM 

m 

CM 

CO 



CO 

sO 

CM 

CM 

CO 

CM 

co 

3 

in 

CO 

r- 

rH 

m 

® 

CM 

co 

m 

vO 


-H 


rH 

co 



CM 

CM 

m 








o 

00 

o 

o 

o 

n* 

<f 

o 

CO 

co 

m 

ao 

H» 

NO 

CM 

A 

o 

CM 


CO 

s 

CO 

'O 

ao 

O' 

I*** 

CM 

o 

A 

<0 

A 

o 

r^. 

rH 

CO 



CM 

CM 

m 








CO 

NO 


s 

40 


SO 

ON 


CO CO CM 
CM 00 H 
r4 On h* 


cm m 

CO CM 
00 


NO 

in 


cm 

m 


r^- 

CO 


oo 

NO 


m o 
cm co 


<r co 

CO NO 


ON H 

m oo 


NO 

m 


NO 

On 


CM m 

cm m 

rH On 


S CSI CM 
CO CM 
** 00 


m 


CM 


CM sO 

m co 


NO CM ^ 
SO CM CM 


CM 

<T 


m 


co 


o 

CM 


co O 

NO 00 


00 SO CM 
nO On CM 

m h 


3 

On 


H CM CO 
rH CO CM 

<r oo 


NO 

m 




r* 

m 


CM 


00 

so 


CM 

CO 




CM 

CM 


nO 00 

sr‘ cs* 


<s o» 

>C N 


>0 

a 


A A 
O' cs; 


vO 

O' 


O A 


v0 A 

o a 
oo 




« § 


% 

00 

*H 

•s 

X 


CM 

a 


oi 

w 

4i 

4 

3 

jC 

u 

CO 

CO 


CM 


9 

u 


u 

0> 


n. 

CO 

co 


m 

nO 


r** 

A 

A 

CO 

o 

A 

O *H 

3 

in 

H 

o 

A 

CO 

sr 

H 

O A 

o 

in- 

-H 

A 



A 

IS H 

rH 

m 


nO 


4i 

9 

U 


s « 


2 3 


a 

•o 



u 


«t 

9 


X 



X 


00 


0 ) 



•H 


> 

St 


<y 

X 

V 

« 

2 

Er 



10 


3 


c 

10 

rH 

•0 


o 

4 ) 

rH 

V 


00 

C 

<9 

V 

c 

« 

c 

u« 

VI 

<9 

M 

at 


w 

•H 

« 

H 

A 


•o 

3 


"O 


c 

JC 

m 

1-4 

*t 

M 

L 

a> 

o 

a 


e 

rH 

MH 

m 

St 

o 

rH 

TJ 

!> 


2 

o 

as 

i 

o 

vi 

o 

Vi 

o 

I 

a 

o 

•o 


« 

3 

2 


oo 

a> 

jt 

m 

$ 


> 

x 

o> 

« 

as 


3 3 


9 

0) 

P5 


J l 

85 95 


V 

rH 

& 

> 

« 

as 



s 

Vi 

« 

*■» 


■o 

1 i 

O <9 


nO no 

S 2 


►» 

S 

Vi 

41 

•n 

s 

a 

i 

8> 


HT 

A 


CS 

i-4 

00 


i-4 A 


T1 

3 


’ts. 

« Q U *r 4 


CO 

* -3 

• - t» » 

a, u 

« w O Q O 

Vl Vi A 1-4 a * M 

O 3 -H tv A tO v-4 

A VI A i-4 A M 

L. B O « A .C < 

. $ k 3 M * - 

‘ 4 2 8 ; n 

M vi « <h e a 

•St 

v* a o 

* « 5 

o- cv Cu ft. (V 



H 

2 


184 


Pittsfield, Massachusetts 










BUDGET B ($59.4 billion) BUDGET C ($67.6 billion) BUDGET E ($93.6 billion) 

1965 Uncompensated Compensated Uncompensated Compensated Uncompensated Compensated 


ACDA/E-156 


O' 

-* 


CM 

H 

m 

o 

CO 

<T 

-4 


tT> 

oo 

vO 

>o 

m 

a. 

«r> 

&* 

•o 

m 

o 

<T 

o 

r> 

H 

CM 

CM 

r*» 

m 

CM 

m 



<n 

CM 

H 

rH 

-4 

H 

CM 

o 


H 

in 

Mf 

in 

m 

ON 

vO 









H 








r-C 









CM 

O' 

o 

rH 

CM 

m 

co 

CM 

•n 

vO 

ON 

pH 

r>v 

s 

n 

CM 

8 

cn 

m 


CM 



GO 


o* 


«n 


>» 

vO 

CO 

CM 


CM 


4A 

o 

OO 

r^. 

o 


CM 

o 


CM 

MD 


o 

cn 





*H 


CM 


m 

rH 

m 



H 


O' 

CM 

cn 

in 

K"l 

CM 

























H 

o 

o 

in 

ON 

%n 

OS 

MT 

o 

ao 

vO 

o 


o 

rH 

o 

m 

so 

vO 


H 

CM 

m 

m 

c* 

cn 




<n 

CM 


H 


00 

H 


pH 


cn 



O' 



ST 

CM 

«o 

cn 


cn 




H 



CM 

00 

CM 

cn 

vO 

O 

CM 

CO 

PM 

3 

CM 

O 

m 

O' 

O 

cn 

<r 


v£> 


cn 

<T 

cn 

V0 

H 

m 


<r 

m 





rM 


CM 


cn 

H 

cn 


cn 

r** 


8 


00 

cn 


vO 

*> 

S5 

O 


sO 

<o 

CM 

in 

CM 

cn 

O' 

CM 


cn 

m 

»n 


vO 

s 


* 

O 

H 

m 


cn 

CM 

m 

o 

GO 

o 

rH 

n* 

pH 

cn 

00 

S 3 


o 

C* 

m 

r^. 

cn 

O 

cn 

■M 

CM 

cn 

m 

> 5 - 

cn 

cn 

pH 

O' 

cn 

CM 


CM 

«n 

pH 

PM 

pH 

cn 

cn 

m 


m 

m 

o 

m 

















pH 







pH 


n 


o 

CM 

CM 

m 

O' 

00 

CO 

o 

CM 

Nf 

sO 

O' 

nO 

<n 

o 

c*. 

o 

pH 

cn 

in 

pH 


cn 


Ch 

cn 



vO 

00 

PM 

Mf 

cn 

00 

m 

O 

•o 

OO 


o 

cn 


CM 

cn 

cn 

^4 

O' 



cn 

<n 





pH 


PM 


rc 

pH 

m 



pH 


ON 

CM 


<n 

PI 

sr 

cn 

























pH 

9 - 

vO 

pH 

o 

oo 

<r 

CM 

cn 

o 

O' 

CM 

CM 

co 

o 

cr\ 

m 

mO 

m 

o 

C* 

ao 



o 



n n n 


cn cm 


cm in 


m in 


CM 

pH 

O' 

pH 

PM 

'5- 

as 

CM 

m 

O 

o 

CM 

in 

ao 


CM 

8 



pH 

CM 

m 

o 

O' 

cn 

Os 

00 

CM 

s* 

<r 

vO 

00 

CM 


cn 

00 

m 

o 

sf 

oo 


cn 

cn 

CM 

cn 

cn 

4-4 

oo 

sO 


cn 

<n 





pH 


CM 


cn 

4-1 

cn 



pH 


o\ 

CM 


cn 

m 


CM 


n* 

ao 

o 

m 

cn 

CM 

O 

SO 

pH 

rs 

00 

O 


o 

CM 


m 

O' 

Os 

r^. 

cn 

sO 

cn 

o 

cn 

pH 

pH 

cn 

m 

<T 

cn 

cn 

pH 

O' 

m 

pH 

<T 

rs 

m 

pH 

CM 

pH 

CM 

CM 

m 


m 

m 

o 

m 

















rH 







pH 


m 

in 

o 

CM 

CM 


o 

O' 

00 

pH 

PM 

m 

m 

Os 

vO 

cn 

00 


OS 

pH 

cn 

cn 

Os 

o 

cn 

O' 

O' 

<n 



vO 

O' 

PH 

<* 

cn 

ao 

m 

o 


ao 

ps. 

O' 

cn 

cn 

CM 

cn 

cn 

o 

ao 

pH 


cn 

cn 





pH 


<N 


cn 

pH 

<n 





Os 

CM 


cn 

m 

sj- 

cn 


K 


CM 

pH 

N 

o 

CM 

ao 

•4 

O' 

oo 

m 


pH 

ao 

CM 

HT 

CM 

-4 

in 

o 

CM 

»o 

oo 

ao 

CM 

as 

CM 

CM 

cn 

'O 

m 

cn 

<*> 

pH 

O' 


CM 

m 

cn 

m 

CM 


rH 

cn 

~4 

sO 

sf 

m 

m 

o 

m 


m cn in 

O'. 0\ M 

<n cn 




O' CO 
00 CM 


00 H ^ 

CM CO O 

cm cn pH 


h «n n 
<r co 
<n 


OOr^OOOiOlrHvOOO 

OscncMpHcncnQf^ 

N (*)!/)< 


H 'C ^ H 10 4 ^ H N 

c*cMCOcn<ninr^pH*4 , Os'OOos 
cn CM rH pH cn 


or^oscO'Oulr^.r^rHr^ 
r^.iAcocnrHr^oioO'Om 
GO *h cm cn <r 


a 

5 

i 

« 


v> 

o 

a. 


oc 

« 

U 

I 

a 

o 

oo 

« 

kl 

o 

X> 

s 

4 J 

u 

o 

0. 


J4 

O 

? 

» 

I 

u 

o 

I 

u 

i 

a. 

i 

o 

S 

-o 

•H 

> 

O 

>4 

04 


T4 

3 

* 

o 

•r4 

h 

3 

£ 


« 


o 

T3 


Vi 

O 


§ 8 
$ . 
4 5 

> JO 

o « 

£ 5 


3 

3 

o 

u 

a 


41 

a 

U 

3 


3 ! 3 


M 

£ 

* 

A 

M 

»4 

4) 

•H 

5 


U 

V* 


T» 

n 

v 

x 


■H 

1 

W 40 O 
<4 O "ri «M 

« J h d j 

w z H u 

2 


; . 3 

•v a 


A 

o 


> 

u 

« «l 

V u 

m m 

o « 

§ x -H 


g 

60 

V 

£ 


3 


V> 

41 

VI 

a 

2 

i 

i 


„ o y 

t2 S3 5 <3 (S 


u 

■n 

<y 


g 

cn 

as 

z 

pH 

£ 

t/5 


V. 

3 

O 

• 

tt 

2 

* 

A 

m 

m 

o 

>“> 


*4 -S 

h vi a 

5 p . 3 3 


» 

33 3 

o 


►» • H 

H 


« O 
O "H 


<A 


« «-4 d 

j « o 

1 13 

3 8 S S 8 8 

w m (A u n n 


•O 

T» 

« « 

Wl *H 

? E 
32 *2 
4 S 
3 3 

T* 

U » 

E » 

3 S 


185 


Francisco-Oak Land, California 1086 1301 









BUDGET B ($59.4 billion) BUDGET C ($67.6 billion) BUDGET E ($93.6 billion) 

1965 Uncompensated Compensated Uncompensated Compensated Uncompensated Compensated 

REGION EMPLOYMENT EM? X UNEMP EMP X UN EM? EM? X UNEMP EMP X UNEMP EMF X UNEMP EMP Z UNBCP 


ACDA/E-156 


<T 

-o 

UO 

CM 

H 

CM 

o 

r4 

CM 

00 

m oo 


O' 

« 

»"* 

'5* 

in 

o 

CO 

rH 

O' 



rH 

m 

CM 

rH 

ro 

m 

rH 


rH 

cn 

CM 

CM 

rH 

-3 

rH 

m 

y 

m 

CM 

CM 

cn 


C4 


O' 

rH 

rH 


cn 

00 

m 


os 

cn 

VO 

cn 

m 

S 

58 

oo 

CM 

© 

rH 

4> 

CM 

OV 


r- 

o 

a 


GO 

00 

rH 

o 

y 

cn 

o 

rH 

s© 

© 

© 

o 

m 

m 

y 

«o 

© 

cn 

y 

© 

-» 

rH 


»n 

rH 



i-4 

rH 




CM 


H 

CM 

rH 


<*> 



CM 


r4 


o* 

ao cn 

O CM 

CM 

o <r o 

,7 

,0 

.0 

o oo o <n o 

o 


o o 

vD to 

r4 tO 

CM 

cn 

H 

CM 

m 

rH 

cn 

<r 

CM 

cn 

CM 

CM 


rH 

st 

cn 

v© 

00 

cn 

<* 

00 

CM 

m 

r>- 

<r 

r-7 


o 

o 

o> 

O' 

CM 

sO 

3 

Os 

cn 

00 

3 

V0 


CO 

00 

CM 

rH 


m 

rH 

H 

sO 


»o 

rH 

45 

rH 

in 

«n 

HT 

r^- 

cn 

m 

sO 

m 

rH 



m 

rH 



rH 

rH 




CM 


rH 

CM 

rH 


cn 



CM 


rH 


r% 

sO 

m 


o 

rH 

•H 

cn 


vO 

rH 

CM 

vO 

uo 

m 

rH 

m 

CO 

rH 

vO 

•*D 

co 

oo 


rH 

'•y 

*n 

<n 

CM 

4T 


CH 

vO 

rH 


CM 

rH 

rH 

cn 

CM 

m 

CM 

45 


Hf 

rH 

CM 


s» 

cn 


rH 

rH 

O 

<r 

00 

o 

cn 

00 

cn 


V© 

3 


O' 

Os 

Os 

rH 


CM 

rH 

m 

o> 

1^7 

v© 

rH 

<r 

HT 

00 

00 

o 

rH 

>y 

cn 

o 

rH 

sO 


o 

m 

o 

m 

<* 

<* 


45 

cn 



<r 

m 

rH 



m 

rH 



rH 

rH 




tM 


rH 

CM 

rH 


cn 



CM 


rH 


^y 4© 

nr 


<r 

cn 

rH 

cn 

o 

N© 

rH 

m 

cn 

o 

00 

o 

m 


cn 

00 

o 

oo 

os 

r>7 

rH 

m 

cn 

CM 

<r 

m 

CM 

V© 

CM 

>y 

CM 

rH 

cn 

-y 

CM 

m 

CM 

V© 

<r 

Hf 

cn 

CM 

<y 

>y 

cn 


o 

o 

o 

<f s© 

00 

43 

38 

08 

O 

m 

cn 

3 

oo 

00 

Os 

rH 

r^. 

42 

68 

CM 

O' 

N© 

vO 

o 

Hf 

-y 

00 

cc O 

O 

rH 

V© 

>© 

o 

m 

O 

m 

*y 

s© 

cn 

-ar 

SO 


m 

rH 


m 

rH 

rH 

rH 




f4 


•H 

CM 

rH 

cn 



CM 


rH 


>© 


<r 

CM 

rH 

o 

o 

CM 

s© 

v© 

o 

cn 

m 

fv. 

-3 

o 

cn 

00 

Os 

-3 

m 


00 

r*» 

O 

<y 

in 

cn 

CM 

>y 

-y 

CM 

s© 

rH 


CM 

rH 

rH 

cn 

CM 

m 

CM 

4> 

cn 

<r 

rH 

CM 

-3 

-3 

cn 


GO 

rH 

O' -O 

o 

O cn 

00 

s 

o 

vO 

3 

s© 

OS 

On 

Os 

rH 


CM 

rH 

cn 

Os 


s© 

rH 

m 


oo 

o 

rH -y 

cn 

H 

s© 

S© 

O 

m 

o 

m 


-y 


s© 

cn 

•y 

N© 

y 

in 

rH 


<n 

rH 


rH 

r4 




N 


rH 

CM 

rH 


cn 



CM 


rH 


cn 

00 

CM 

cn 

m 

y 

Ov 

45 

CM 

m 

y 

o 

Os 

o 

o% 


in 

cn 

r4 

ao 

O 

oo 

tn 

o 

m 

m 

m 

y 

cn 

y 

•3 

<N 

45 

CS| 

m 

CM 

CM 

rH 

m 

CM 

in 

cn 

r^. 

y 

-3 

CM 

<n 

m 

m 

cn 


y 

o 

00 

cn 

rH 

Os 

m 

00 

n. 

Os 

in 

cn 

«n 

tr> 

00 

00 

oo 

cn 

CM 

ta 

CM 

O' 

y 

in 

cn 

cn 

•3 


co 

O 

O 

y 

cn 

O 

o 

s© 

s© 

s© 

O 

m 

o 

y 

y 

y 

45 

vO 

cn 

y 

N© 

cn 

m 

r4 



sn 

.4 



rH 

44 




CM 


-4 

CM 

rH 


tn 



CM 


rH 


in y *h 

H O' OO 

cn 


OS oo rH m 

(J\ 


©s rn o m cm «h m 

o» cn s© in in H in 

CM 


vO co o cm r* cm 

oi cm cm <n oo m cn 

cm fH cm 


y os o 
cn m cm 


’H 

E 


o 

« 144 


t. « 

o u 


44 <8 

<3 £ 

ja 

» 

SI iS 

cfl so 

o 

•-> m 
u 

P c 
e ee 

(0 (A 


03 

5 


I ! 


► 

•H 

X 


5 2 

a i 

S u 

« Q 


-3 

03 
»4 q 

o 3 
« « 
u a. 


«H 25 
» l 

•h « 


J3 

4J 

9 


1 

s 

s 

trt 


C 

o 


« 

u 

v 

(S 

l 


3 

S 


j * * l 

*» 

* If} • 

»% 44 -q 


s 2 


u 

a 


S 


U 

o 
& 

5 
> 

at 

5 

m in in 


•h a 
u x 

3 S 

5 ° 


■ 

I 

•* 

£ 
•H 

>8 

i 

I 

« 5 8 

s ~ 2 s 9 

| 73 t> T3 -|j 

3* •—I r4 »4 <H 

«* « « « 

• v< *4 t4 74 

I) It* <47 U4 4-t 

M 


8 8 g 
* S " 


m 

74 

a 

t4 

00 

id 


4-1 

• 

1 

4 

2 
o 

* 

g 

W 

H 


•9 

t4 

W 

O 


<# 

2 


M M 

o o 

SM ►« 
74 

o 

44 

60 

a 

:~ 

O 

r4 

ht 

40 

c 

« 

1 

M 

3 i 

t4 

-C 

5 

* 

e» 

4J 

S) 

04 

A 

• 

r «* 

5 

« 

e 

t 

u 

9 

n « 

9 9 

A 

3 

4> 

CO 

?3 


9 

3 


11!1141 i 13 i 


a. a, a. a. a. 
in m in w m 


» 

w 

u u 

to to 


u 

5 


■3 

H 


dC 

o 

! 

t4 

6 

i 

« 


& 

s 

« 

g 

a 


nm 

H 


H H H 


186 


Trenton 












BUDGET B ($59.4 billion) BUDGET C ($67.6 billion) BUDGET E ($93.6 billiou) 

1965 Uncompensated Compensated Uncompensated Compensated Uncompensated Compensated 


ACDA/E-156 


m 

n* 

CO 


»n 

•o 

r**- 

m 


cn 


m 


rH 

00 

vO 

<r 

On 


rH 


rH 

H 

cn 

cn 


cn 

CM 

f"* 

cn 

<r 

CM 


rH 

cn 

rH 

•o 

CM 

PM 

<n 

00 

CH 

cn 

DO 

vO 

43 

i 

O' 



m 

<r 

in 

CO 

CM 

ON 

rH 

On 

<T 




<r 


<n 

o 


rH 


H' 

M3 

m 

m 


o 

cn 

On 

CM 

<n 

ON 

rH 

rH 



•H 

•H 


cn 


rH 


rH 


rH 

CM 



CM 










rH 













O' 

o 

o 

on 

no 

m 

o 

o 

00 

4> 

r>. 

nr 

•H 

o 

ao 

o 

'£> 

o 

o 

cn 

CM 




H 

Mf 

CM 


in 

rH 

CM 

r4 

m 




CM 



rH 

rH 

O' 

<r 

o 

O' 

ON 

nO 

O' 

m 

rH 




CM 

O' 

o 

cn 

43 

O' 

P' 

m 

rv 

■if 

Mf 

cn 

o 

43 

m 

h* 

in 

vO 

«n 

m 

in 

o 


On 

m 

cn 

O' 

rH 

H 



H 

«H 


cn 


r-l 


rH 


rH 

CM 



CM 

eH 

r-« 








rH 













sO 

*H 


rH 

•« 


CM 



<r 

CM 

ao 

CM 



o 

CO 

cn 

rH 

o 

nr 

CM 


cn 


vO 


CM 

00 

CO 

in 

m 


CM 

cn 

CM 


CM 

CM 


so 

m 

<r 

O' 

m 


<r 

CM 

m 

o 

m 

M3 

cn 

ON 

in 

ON 

rH 

o 

4) 

rH 

«o 

r^. 


CO 

<n 

o 

NO 

m 

<r 

in 

NO 

<? 

m 

<T 

o 

m 

ON 

m 

cn 

o> 

*H 

rH 



rH 

rH 


m 


rH 


rH 


rH 

P4 



CM 

rH 

rH 








rH 













nO 

m 

CM 

in 


ON 

CM 


1^- 

m 

PM 

ON 

cn 

•O 

n* 

o 

CO 

cn 

cn 

O 


CSI 

CM 

cn 



<T 

CM 

ao 

cn 

in 

cn 

00 

CM 

cn 

CM 

•» 


CM 


30 

CO 

m 

oo 


CM 


<3T 


ON 

m 

m 

cn 

O' 

CM 

On 

rH 

ON 

«n 

rH 



<r 

m 

<n 

o 

■43 

rH 



43 

Mf 

m 

<jr 

o 

<n 

ON 

CM 


ON 

*H 




rH 

rH 


cn 


rH 


*H 


rH 

CM 



CM 

•H 

rH 








•H 













i ^ 

rH 

43 

ON 

m 

f". 

rH 

<n 

n£> 

CM 

rH 

On 

rH 

rH 

cn 

00 


rH 

O' 

On 

-» 

CM 

•H 

CM 

sr 

vO 

-« 

CM 

00 

cn 

in 

cn 


CM 

cn 

ri 


CM 

rH 

<n 

CO 

m 


O' 

<r 

cn 


*H 

m 

o 

m 

m 

cn 

O' 

m 

o 

rH 

o 


rH 


fN 

<r 

m 

cn 

o 

vZ> 

cn 

<r 

m 

\D 

<r 

m 

<r 

o 

'f 

ON 

m 

cn 

ON 


rH 



rH 

4 


cn 


rH 


rH 


*H 

CM 



CM 

rH 

rH 








rH 













CO 

o 

o 

•4- 

CM 

CO 

<r 

43 

rH 

co 

m 

cn 

m 

CM 

00 

CM 

rH 

rH 

r* 

43 


CO 

CM 

m 

>c 

o 


CM 

O' 

cn 

m 

•o 

p>* 

cn 

m 

CM 

m 

cn 

CM 

-» 

r*» 

m 


On 

CM 

CO 

•4 

CM 

sr 

ON 

m 

rH 

CM 


m 

O' 

rH 

*> 

m 

On 

<*• 

r- 


CO 

m 

o 

wC* 

CM 

N> 

<r 

M3 

<3 

m 

nr 

o 

cn 

o» 


cn 

CO 





rH 

rH 


cn 


rH 


rH 


rH 

CM 



PM 

rH 

cH 








rH 













o 

to 

N 

cn 


rH 

fO 

vT> 

»n 

cn 

rH 

rH 

O 

43 

*H 

CM 

03 

H 

00 

m 

o 


m 

<n 

CM 

03 

<A 

43 

nr 

O 

43 

HC 

<r 

CM 


cn 


CM 

rH 

CD 

H 

ri 






ON 


rH 


^4 


rH 

H 



CM 

rH 

rH 















-o 

§ 



• 

















•H 



a 
















<6 

& 



1 




* 

-H 

a 


ao 
u 


« 

i 

-r4 

U 

■< 


a 

o 

• 

u 

9 

H 


O 

i 

o 


<0 

a 


9 

H 


•3 

* 

4 

« 

8 


9 

H 



id 

8 



I 


2 


5 


s « 1 3 3 3 3 

2 £ ■H r( r( J J 

5 5 » a» » at » 



§ 


a 

« 

u 

>4 

4 

SB 

I 


60 

a 

9 

0 


187 












ACDA/E-156 


As would be expected, the variation in the range of estimated 
unemployment among these 219 smaller regions is wider than among the 51 
state areas. Table 12, summarizing the extremes of Table 11, indicates 
that the SMSA which is estimated to face the highest unemployment rate 
in 1972 as the result of reduced defense expenditures is Lawton, Okla¬ 
homa with an unemployment rate between 14.8 and 16.7 percent of its 
labor force. In addition there are six more SMSA f s which are estimated 
to face unemployment rates in excess of 10 percent of their labor force 
even in the presence of compensatory policies designed to maintain high 
levels of consumer spending. This is in sharp contrast to the unem¬ 
ployment estimates for states which projected only one state, Alaska, 
having unemployment in excess of 10 percent. 

The SMSA f s with projected unemployment rates in excess of ten 
percent are relatively small in total employment except for Albuquerque 
and the California areas of San Diego and Salinas - Monterey. However, 
many other SMSA’s would face rates of unemployment, under these 
assumptions concerning defense spending, which would be above the 
national average generated by the respective defense spending assump¬ 
tion. 


Offsetting the unemployment in SMSA’s with higher than average 
expected unemployment under these assumed reductions in defense expen¬ 
ditures is the large number of SMSA's with below average projected 
unemployment. The high and low ends of the unemployment scale of Table 
11 are shown in Table 12, which indicates that in the cases of 
reduced military spending identified as Budgets B ($59.4 bil.) and C 
($67.6 bil.), there would be seven and five SMSA’s, respectively, with 
projected unemployment rates falling below 1.3 percent. 

} 

These estimates indicate that the severity of impacts from 
reduced arms expenditures would vary widely among the nation’s metro¬ 
politan areas, depending upori their industrial composition and other 
factors. Even within individual states, the rates of unemployment would 
vary widely between the metropolitan areas of the state. For example, 
in Oklahoma, which contains the SMSA (Lawton) with the highest pro¬ 
jected unemployment rate (from 16.7 to 16.4 percent, depending on the 
assumed cut in military spending), Tulsa is estimated to have one of 
the lower unemployment rates (2.1 percent) with probable actual labor 


188 


ACDA/E-156 


TABLE 12 

Standard Metropolitan Statistical Area 

Ranking by Unemployment Impact Estimated for Budget B ($59.4 billion), 

Compensated Military Budget Assumption, 1972 


Rank 

For 

SMSA 

Selected SMSA’s 

State 

Employment 

(000) 

Unemploy¬ 
ment (%) 

1 

Lawton 

Oklahoma 

43 

16.7 

2 

Duluth-Superior 

Minnesota-Wisconsin 

88 

12.1 

3 

Fayetteville 

North Carolina 

84 

11.8 

4 

Salinas-Monterey 

California 

98 

11.5 

5 

San Diego 

California 

480 

10.0 

213 

Ann Arbor 

Michigan 

91 

1.2 

214 

Flint 

Michigan 

199 

1.2 

215 

Jersey City 

New Jersey 

264 

1.2' 

216 

Lynchburg 

Virginia 

59 

1.2 

217 

Saginaw 

Michigan 

86 

1.2 

218 

/ 

New Haven-Waterbury 
Meriden 

Connecticut 

313 

1.1 

219 

Lansing 

Michigan 

176 

1.0 


189 



ACDA/E-156 


TABLE 12 (continued) 

Standard Metropolitan Statistical Area 

Ranking by Unemployment Impact Estimated for Budget C ($67.6 billion), 

Compensated Military Budget Assumption, 1972 



For Selected SMSA's 


Rank 

SMSA 

State 

Employment 

(000) 

Unemploy¬ 
ment (%) 

1 

Lawton 

Oklahoma 

44 

16.4 

2 

Fayetteville 

North Carolina 

86 

12.0 

3 

Salinas-Monterey 

California 

100 

11.6 

4 

Duluth-Superior 

Minnesota-Wisconsin 

88 

11.5 

5 

San Diego 

California 

491 

10.0 

211 

Ann Arbor 

Michigan 

91 

1.3 

212 

Flint 

Michigan 

198 

1.3 

213 

Lynchburg 

Virginia 

59 

1.3 

214 

Saginaw 

Michigan 

86 

1.3 

215 

Erie 

Pennsylvania 

104 

1.2 

216 

Jersey City 

New Jersey 

264 

1.2 

217 

New Haven-Waterbury- 
Meriden 

Connecticut 

314 

1.2 

218 

Springfield 

Missouri 

64 

1.2 

219 

Lansing 

Michigan 

175 

1.1 


190 



ACDA/E-156 


TABLE 12 (continued) 

Standard Metropolitan Statistical Area 

Ranking by Unemployment Impact Estimated for Budget E ($93.6 billion) 

Compensated Military Budget Assumption, 1972 

For Selected SMSA's 


Rank 

SMSA 

State 

Employment 

(000) 

Unemploy¬ 
ment (%) 

1 

Lawton 

Oklahoma 

49 

14.8 

2 

Reno 

Nevada 

45 

14.4 

3 

Fayetteville 

North Carolina 

94 

10.9 

4 

Salinas-Monterey 

California 

108 

10.9 

5 

Duluth-Superior 

Minnesota-Wisconsin 

88 

10.5 

6 

Albuquerque 

New Mexico 

118 

10.1 


213 

Bloomington-Normal 

Illinois 

40 

. 6 

214 

Des Moines 

Iowa 

120 

.5 

215 

Flint 

Michigan 

196 

.5 

216 

St. Joseph 

Missouri 

33 

.5 

217 

Springfield 

Missouri 

63 

.5 

218 

Erie 

Pennsylvania 

105 

.4 

219 

New Haven-Waterbury* 
Meriden 

Connecticut 

316 

.2 


191 



ACDA/E-156 


shortages. Even in California, with metropolitan areas where unemploy¬ 
ment is estimated at 10.0 percent and higher there are areas like San 
Jose, where unemployment is estimated at approximately 4.6 percent. 

The lowest unemployment (1.0 percent) is projected for Lansing, Michigan 
with three other Michigan areas (Ann Arbor, Flint and Saginaw) also 
falling at the low end of the unemployment scale. Estimated unemploy¬ 
ment for many other SMSA ? s would be below the national average of 
approximately 3.5 percent. Details are given in Table 11. The esti¬ 
mates are not inconsistent with the view that special transition 
assistance may be needed for some areas with serious unemployment 
problems. However, the estimates also indicate that most of the SMSA 5 s 
in the nation could easily adapt to lower levels of defense expendi¬ 
tures, and that many areas would possibly face labor shortages. 

IV.1.4.3.d Impacts Upon Countries 

The regional projection model used in this study is based upon 
national interindustry projection totals of employment which the 
regional model then allocates among 51 states. A second stage of the 
model is then used to allocate the state totals to the 219 SMSA's of 
the nation and the 3070 counties or county equivalents of the nation. 
Detailed estimates for the nation, the states, and SMSA f s have been 
included in this study, but not all estimates for the counties have 
been included, even though they would have been available with very 
little additional effort or expense. There are two major reasons for 
their omission. First, the amount of space required for presentation 
of estimates for 3070 counties in the detail available would be un¬ 
manageable. Secondly, the reliability of the estimates must be pre¬ 
sumed to be inversely related to the size of the region and amount of 
its economic activity, so that the county estimates were regarded as 
being less valid than those for states and for SMSA’s. 

However, despite this fact, estimates have been included here 
for some individual counties, namely those 116 SMSA’s which consist of 
single counties. The names of these counties are noted in Table 13 and 
detailed estimates of employment impacts upon them resulting from 
changing defense expenditures can be found in Table 11. Estimates for 
these counties are presented in order to include all SMSA’s in the 
study; these individual counties are assumed to have sufficiently 
large and diversified economies to permit the model to be of interest. 


192 




ACDA/E-156 


TABLE 13 

Standard Metropolitan Statistical Areas Consisting of Single Counties 


SMS A 

COUNTY 

STATE 

Albany 

Dougherty 

Georgia 

Albuquerque 

Bernalillo 

New Mexico 

Altoona 

Blair 

Pennsylvania 

Anaheim-Santa 

Ana-Garden Grove 

Orange 

California 

Anderson 

Madison 

Indiana 

Ann Arbor 

Washtenaw 

Michigan 

Asheville 

Buncombe 

North Carolina 

Atlantic City 

Atlantic 

New Jersey 

Austin 

} 

Travis 

Texas 

Bakersfield 

Kern 

California 

Baton Rouge 

East Baton Rouge 

Parish 

Louisiana 

Bay City 

Bay 

Michigan 

Billings 

Yellowstone 

Montana 

Birmingham 

Jefferson 

Alabama 

Bloomington- 

Normal 

McLean 

Illinois 

Boise City 

Ada 

Idaho 


193 





ACDA/E-156 


TABLE 13 (continued) 


Bridgeport, 

Stamford, Norwalk 

Fairfield 

Connecticut 

Brockton 

Plymouth 

Massachusetts 

Brownsville- 
Harlingen- 
San Benito 

Cameron 

Texas 

Canton 

Stark 

Ohio 

Cedar Rapids 

Linn 

Iowa 

Champaign-Urbana 

Champaign 

Illinois 

Charleston 

Kanawha 

West Virginia 

Colorado Springs 

El Paso 

Colorado 

Decatur 

Macon 

Illinois 

Des Moines 

Polk 

Iowa 

Dubuque 

/Dubuque 

Iowa 

Durham 

« 

Durham 

North Carolina 

El Paso 

El Paso 

Texas 

Erie 

Erie 

Pennsylvania 

Eugene 

Lane 

Oregon 

Fayetteville 

Cumberland 

North Carolina 

Fort Lauderdale- 
Hollywood 

Broward 

Florida 

Fort Wayne 

Allen 

Indiana 

Fresno 

Fresno 

California 


194 


ACDA/E-156 


TABIE 13 (continued) 


Gadsden 

Galveston-Texas 

City 

Great Falls 

Green Bay 

Greensboro -High 
Point 

Hamilton- 

Middleton 

Hartford, New 
Britain 

Honolulu 

Jackson 

Jacksonville 

Jersey City 
Kalamazoo 

Kenosha 

Lafayette 

Lafayette-West 

Lafayette 

Lake Charles 

Lancaster 

Laredo 

Las Vegas 


Etowah 

Galveston 

Cascade 

Brown 

Guilford 

Butler 

Hartford 

Honolulu 

Jackson 

Duval 

Hudson 

Kalamazoo 

Kenosha 

Lafayette Parish 
Tippecanoe 

Calcasieu Parish 

Lancaster 

Webb 

Clark 


Alabama 

Texas 

Montana 
Wisconsin 
North Carolina 

Ohio 

Connecticut 

Hawaii 

Michigan 

Florida 

New Jersey 
Michigan 

Wisconsin 

Louisiana 

Indiana 

Louisiana 

Pennsylvania 

Texas 

Nevada 


195 




ACDA/E-156 


TABLE 13 (continued) 


Lawton 

Comanche 

Oklahoma 

Lewiston-Auburn 

Androscoggin 

Maine 

Lexington 

Fayette 

Kentucky 

Lima 

Allen 

Ohio 

Lincoln 

Lancaster 

Nebraska 

Little Rock- 

North Little Rock 

Pulaski 

Arkansas 

Lorain-Elyria 

Lorain 

Ohio 

Los Angeles-Long 

Beach 

Los Angeles 

California 

Lubbock 

Lubbock 

Texas 

McAllen-Pharr- 

Edinburg 

Hidalgo 

Texas 

Madison 

Dane 

Wisconsin 

Manchester 

Hillsborough 

New Hampshir 

Mansfield 

Richland 

Ohio 

Miami 

Dade 

Florida 

Midland 

Midland 

Texas 

Monroe 

Ouachita Parish 

Louisiana 

Muncie 

Delaware 

Indiana 

Muskegon- 

Muskegon 

Michigan 


Muskegon Heights 


! 


196 


ACDA/E-156 


TABLE 13 (continued) 


New Bedford, 

Bristol 

Massachusetts 

Fall River 

New Haven, Water- 

New Haven 

Connecticut 

bury, Meriden 

New London, Groton, 

New London 

Connecticut 

Norwich 

* 


Odessa 

Ector 

i 

Texas 

Ogden 

Weber 

Utah 

Oxnard, Ventura 

Ventura 

California 

Phoenix 

Maricopa 

Arizona 

Pine Bluff 

Jefferson 

Arkansas 

Pittsfield 

Berkshire 

Massachusetts 

Portland 

Cumberland 

Maine 

Provo-Orem 

Utah 

Utah 

Pueblo 

Pueblo 

Colorado 

• 

Racine 

Racine 

Wisconsin 

Raleigh 

Wake 

North Carolina 

Reading 

Berks 

Pennsylvania 

Reno 

Washoe 

Nevada 

Saginaw 

Saginaw 

Michigan 

Salinas-Monterey 

Monterey 

California 

St. Joseph 

Buchanan 

Missouri 

San Angelo 

Tom Green 

Texas 


197 




ACDA/E-156 


San Diego 

San Jose 

Santa Barbara 

Savannah 

Scranton 

Sioux Falls 
Spokane 

Springfield 

Springfield 

Springfield 

Stockton 

Tacoma 

Tallahassee 

Topeka 

Trenton 

Tucson 

Tuscaloosa 

Tyler 

Waco 

Waterloo 
West Palm Beach 


TABLE 13 (continued) 

San Diego 

Santa Clara 

Santa Barbara 

Chatham 

Lackawanna 

Minnehaha 

Spokane 

Sangamon 

Greene 

Clark 

San Joaquin 

Pierce 

Leon 

Shawnee 

Mercer 

Pima 

Tuscaloosa 
Smith 
McLennan 
Black Hawk 
Palm Beach 


California 

California 

California 

Georgia 

Pennsylvania 

South Dakota 
Washington 

Illinois 

Missouri 

Ohio 

California 

Washington 

Florida 

Kansas 

New Jersey 

Arizona 

Alabama 

Texas 

Texas 

Iowa 

Florida 


198 


ACDA/E-156 


TABLE 13 (continued) 


Wilkes-Barre- Luzerne 

Hazleton 

Winston-Salem Forsythe 

Worcester, Fitchburg- Worcester 

Leominster 


SOURCE: U.S. Department of Commerce, Bureau of the 
Estimates, Series P-23, No. 371, August 14 


Pennsylvania 

North Carolina 
Massachusetts 


Census, Population 
1967, pp. 14-32. 


199 






ACDA/E-156 


Estimates in the same amount of detail can readily be made for all of 
the remaining counties in the U.S. If the level of minimal normal 
frictional unemployment is taken to be somewhere around the 3 percent 
level, the estimates here indicate that many of the nation’s SMSA’s 
would face labor shortages, even with reduced defense expenditures. 

This fact suggests that many policy options are available for assist¬ 
ing areas of high unemployment, by means of improved labor market 
information, relocation assistance, and other measures.26 

IV.1,4,3.e Impacts Upon Regional Industries 

Just as the problem of the economic impact of changing defense 
expenditures should not be confined to consideration of an average 
effect upon the total national economy, but should be examined in 
regionally disaggregated terms of impacts upon states and smaller 
regions, consideration at the regional level should not be limited to 
examination of average effect upon the total region, but should also 
consider the matter of effects upon regional industries. If the full 
implications of regional economic impact and possible remedial actions 
are to be realistically appraised, it is important to inquire into 
the expected ultimate effect of expenditure change upon specific 
industries within each region, 

As noted above, the national employment control totals used in 
the regional model are the national industry employment totals adjusted 
to the employment definitions and concepts derived from the census as 
used in the regional model. These adjusted industry employment control 
totals are given in Table 14 for each of the three defense assumptions 
in the compensated and uncompensated versions. National employment 
totals and estimated unemployment rates agreeing with the national 
interindustry estimates are also given. However, unemployment by 
industry is not estimated, because it is assumed that interindustry 
labor mobility occurs. 

Table 14 also includes columns of first differences as a sensi¬ 
tivity test of the differences in employment in each industry under 
the alternative defense assumptions. Column 10 indicates the estimated 
employment difference in each industry between the two extremes of the 
high Budget E ($93.6 bil.) uncompensated assumption and the low Budget B 
($59.4 bil.) uncompensated assumption. Because these are the highest and 


For a discussion of adjustment measures, see chapters in this 
report by Daicoff and Eaton dealing with manpower. 


200 




ACDA/E-156 


I 


«'* «ti 

v •*?' 


—■ sr 


c 
v t 

m 

k A 

U! Z 
u u 

u c, -*» 

► Of" 
C U I 

ft. *■* 


* 


I 


e. r ©ft*. r, «. «.ft eoft*©,ere« ft;*, 
a Af m a A 9 (v. «. ► ►'» ft|r r 

• | * ft. » ‘ 

1 I 

i I i 

f O 0<<A O 9 0, A « A r If a> If If O i r. 
•••••• • •«*•••••*••••« 

ftj^-ftftanrivr ! ft r ft ft — ► <v a 9 
»l [«► **■ -I 

I « I 


I 

0*1 

* 

I 


a '• 


aco rftr. <£ft*»j~frrtra:o ft — o eft 
• ••••• ••••••••••••»• 

I * I: I I ft ft A:tf t-- < A A ft e I ^ I 
I I I I t ► I 9 I I I,I I I 

I I 


C| 

ft*' 

r • 

ft 

i 


4 

i 


c 


c 

I 


c 

I 


0 

• 

0 

I. 


C! 

J 

0i 


if' 




i 


«M 


3 

' u 
t 3 


0 /-s 


\r 

L. 

C 

A 

U. 

c 

k 

u. 

It. 


If 

a 


— ft 

r «~ 

»' 

if 


a. < or 4 « 4- 9 — ciroccftoocfire 

If I S f ftc ft i ft ft ^ ^ Q if «£ ft 

■a ft ► ft a- ir 

: i * i 


I 


ft 

c 


— — <A*-ftlfCC«OClf ffO 9CCa»C<£<fft; 

« m rra«r»-i«fffcfo 

l I ►. — f r »• r 0- ft * 

a ■ t || ft 

I 

— c 0 ft x if ff* if « * ► a r r « e* ir tr tr if ► if «v| 

ft ► irri | i ft r ft c — «ftftft«-»trvtftc 

» ll It »;ft i f a i l J - * — l »c 

—- I I I I I I 

• . 1 
, i 

• •• 

u. Mtff,»-oc«AAji f a(Cifn f ir4r.c' 

U. C « ^tF. «tAf.fftC ifA^ftSL^a 

*- tt-lllilloll — II,!* - *| 

•C. I II III, 


a 

c 


ft 

A* 

o 

ft 

I 


ft 

I 


c «■*, 

9 ■ 
ft< 

I 


c 

I 


c- 


c! 

*! 


c- 

ft 

*1 

a 

O' 

ft 

3 


It 

9 


^ J 


Cl 

0 




m ft 

41 CC 

9 9 0 0 

M. 9 4*. 

X 9 41 

— fft O 

•ft cv» 

0 

C- 

© 

ft 

- ft a 

C ft ft 

0 e c « 

G 0 ^ 

C ft ft 

0 0 or 

ft ft 

r 

c 

c 

C 

3 <f ft 

IT ft ft 

e 4 e 0 

0 •* *£ 

9 a <£ 

e « a 


ft 

c 

ft 


n r. 


a- 9 

a- if 

ft 

3 f 3 

0 ft 

c 

c 

r 

ft 






«*« »>• 

•ft 

c 

«■" 


SC 









ft 

! 

1 

• 

3 O a. 

^5 9 ft 

9 if e:««i if. ft « ft 0 >«i 

9 ® If) 

9 M 

ft 

0 

oj 

•ft 

C 90 

ft If lf> m If. ft a- 

^ 

ft 0’0 

If If 0 

— ft 

if 

c 

<v 


3 X * 

«C ft « 

e « cc 

C ft ff 

9 « < 

9 © 9 

ft 9' 

9 

0 

© 


\ r 


r- ^ 

— a- u: ft 

9 9 If 

4* ft 

ft 

© 


ft 

i 





•A 44 


« 

•* 


6C 


, 





* 


ft 



r ft 0 

•ft m oc 

9 <C ft JW *ft ft 0 

ft ft ft ft aa 

9 d 


© 

«T 

*> 

«■* 





XaiC 

1 

•«• 


vT 

a 


0 

a 

r. 


— ft 


ft 


i 


in 

3 


fl4 ~l 



4) 


ft 


ft if If. iaHCCftftCif rtlON».ff iC OC 
C -M ft ftlft«£—!»AOXl — ftOft«lOCft9 9 0 0 

9 < c <Mo»oirc<nrmti'-e 9 a, cc 

ft f. •« *• « *• aia r< >X ft 3 9 If. f. ft 


ft0lfllfteClC0«Cilf>a.ft.K)lf>fteaa0lO94)«C 
ifiai0(gaif)H(ifoiflON9HO0iOio«(fiO 
jit<ftccjorcffif<<t'oei»i-e 
ft Ki a» a< « a»3 H X ft 9 9 If 41 a" 


ftftr»9»OftXlfV0aa9O»f)ftOft 9 «C *0 BC O 
INI 9 — -a -O a* ft if) aa a* « ft a< f X if H 

-< ft 


ftC«<£ft39ft0>0 09 9099 4. *~ftft© 
»^-40'nu'V*ft9O/»-^3CUft««90Xa»O 

9<x® >0ftae0OftoeC/f)ct.ac.\O9Oifftft 

ft 4) *-> ««*«•<» H <C ft 3 3 If H 


f>4>,r>ft.nftXO 0-,ft ft If. 0 n 3”0 3- fO *5 0 o. 

ifOl/UVSfOHjOC^ina'f-MENlflll'V 
90ft * 


4M) 9 

(\3 IT a- aa aa 


a®9ftX3ftO*Oa4ft 
3 »« 0ft » f f A H 


c 

© 

© 

H 

<0 

4) 

0 

ft 

•H 

• 

tt 

e 

0 


If 

c 

c 

ft 

ft 


0 

•» 


0 



ft 




0 

© 

l/i 

if 

X 

ft 

0 

iO 

0 

• 

-0 

c 


IT 


© 

© 


ft 


* 

•■ft 


c 



ft 




0 

© 

0 

0 


ft 


4-f 

J3 


<£ 


«' 





1 



K) 

c 

If 

ft 

If. 

ft 

0 

O 

ft 

• 

ec 

© 

0 

vC 

r> 

© 

© 

ft 

ft 


© 

•*« 

t 

© 



ft 




9 

0 

9 

ft 

fl 

9 

0 

ft 

•I 

• 

O' 

0 

ft 

>0 

9 

0 

G 

4) 

ft 


ft 

0^4 


X 



ft 


z 

o 


l z~ 


> Jt 
X 3 

*- i_> 
i/I >-* 

23 

z < 


u 

25 

aa l/l 

Z Z 
- G 
X G 


O J 
O *-< UJ 

ar i- 0. 
x x 5 

! UJ ►- 

. J K w 

u -1 ^ z 

i -»s or 

:iit: 

o f- u. 
0 uj 0 T 
a j u x 

MH III 

c a xi 

OXO! 

O «J < 
a. a- u. 


2 
S 

J 

X If. ► 

3 JS 

"isy 


5 S¥S 

J1U1c 


1 ; z 1 


UJ 

► 

•e 

>- 

if 

Uf 


a. /> 

►a UJ i/I 
3 
l/l O 

UJ UJ r— ^ A. 

-J OOOi 
o « < x 
a X U U 
i 1 : x < / 
uii. z < uui 

> aa < * mm 

a ia * Ji 5 •- ui 

Z *.X O » U 2 ZL» O ! > 

»- ac i/i < 5 *-i < z ex 

t *-«ajcoi-ac-auj 

«faU3hU.l/l 


O Ui’ 

10 u» 


X 

I in 2 
l/l Ui < u. 
Z U 


S 

-t| 

J <st 


z 

2 

>■ 

o 

u 

o 


< 

.J 

3 

a 

o 

a 


z 

2 

o 

I 

I 

> 

3 


UJ 

u 

s, 

u> 

X 

o 

» 

<t 


> 

aa 

o 


UJ 

K 

< 

X 

¥• 

jf 

UJ 

X 

>- 

o 

Ji 

% 


201 


















ACDA/E-I56 


lowest budgets considered, respectively, the resulting employment 
differences are interpreted as the maximum probable employment differ¬ 
ence to be considered. The Column 10 total indicates a probable overall 
U.S. employment difference between the two of 2,912,000 with individual 

industry differences as indicated .^ 

• 

These results indicate that the regional model demonstrates 
sensitivity in industry employment levels to extreme variations in 
defense expenditures. The variation measured in Column 10 is regarded 
as extreme, because the low figures are based upon the assumption that 
no compensatory changes in consumer expenditures occur, while the high 
employment estimates are based upon the assumption that an inflationary 
defense budget results in no policy measures to reduce the level of 
consumer expenditures. However, it should be noted that even the 
uncompensated estimates are partially compensated to the extent that 
disposable personal income is not allowed to fall below the level which 
results in 3.7 percent unemployment in the normalcy model. It should 
also be noted that while in this particular model, offsetting compensa¬ 
tion for decreased defense expenditures is limited to increases in 
consumption expenditures, the actual range of available compensatory 
measures is much more comprehensive, including increases in other 
government programs, increases in investment, and other measures. These 
alternative measures could have quite different industrial and regional 
impacts, which require study. 

Column 11 estimates employment differences under slightly less 
extreme assumptions of the same budgets, B ($59.4 bil.) and E ($93.6 
bil-/, but allowing for partially offsetting compensatory changes in 
consumption in each case. The national employment differential is 
reduced to 84,000 with industry differentials as indicated. Of interest 
is the fact that employment is projected to be higher under the compen¬ 
sated version of the smaller defense budget. Column 12 is designed to 
show an even moie realistic comparison of the compensated versions of 
Budgets E ($93.6 bil.) anci C ($67.6 bil.). This comparison yields a 
national employment total 97,000 less under the compensated high 
defense budget than under the low one. It should be noted that under 


The negative signs before some of the zero entries in Columns 
10-12 in Table 14 indicate computer estimations of column entry 
difference which were negative but smaller than the level of signifi¬ 
cance reported. 


202 



ACDA/E-156 


the last two comparisons, employment adjustments take place between 
industries, some of which indicate higher employment with a low defense 
budget than with a higher defense budget, reflecting variations in 
procurement mix. At the national level these last two comparisons 
may be interpreted to mean that the Maryland models see compensatory 
policies of an anti-recessionary nature as having less of an employment 
impact than those designed to be anti-inflationary. 

In order to permit these employment differential comparisons to 
be put on a percentage basis. Columns 13, 14 and 15 show the industry 
employment differentials as a percentage of Column 5, the Budget C ($67.6 
bil.) employment totals, compensated. These comparisons are shown 
to indicate the possible percentage ranges of employment adjustment by 
industry. 

While the 20 industry classification available down to the SMSA 
and county level provides an enormous amount of detailed regional 
industrial employment estimations, the level of aggregation required 
conceals much of the intra-incustry adjustment which would result from 
changes in defense expenditures. Many important defense supplying 
industries are not separately identified, such as electronics, ordnance, 
aircraft, and shipbuilding. All of these activities are included as 
components of larger industry classifications. However, as noted 
above, a more detailed industry classification could have been used 
at the state level, but not at the SMSA or county level. 

The 20 industry classification used in this study does, despite 
its aggregation of important defense supplying activities, indicate a 
wide range of difference in industry response to changing defense 
expenditures. Table 14 indicates that the largest negative impact, or 
decline in employment under lower defense budgets would be felt by the 
air-ship-railroad equipment, machinery, and the miscellaneous manu¬ 
facturing industries. However, the model indicates that partially 
offsetting large-scale increases in employment, especially under the 
compensated versions of the assumptions, would occur in the services, 
trade, finance-insurance-real estate, and other consumer-oriented 
sectors. Other activities, such as chemicals and public utilities, 
display less sensitivity to changing defense budgets. 

However, since economic impact adjustments ultimately must be 
faced at their regional level, it is important to trace through the 
national, regional and industry impacts to the effect upon industries 
within each region. Table 15 (Appendix B) therefore, shows estimates 
of the 51 state employment differentials by industry for each defense 


203 


ACDA/E-156 


budget assumption compensated and uncompensated.^ As would be expected, 
the model shows more sensitivity to industry employment differentials 
under the changing defense assumptions for states than for the nation, 
and greater differentials for SMSA"s than for states. 

Under the most extreme assumptions about sharp cuts in defense 
expenditures without compensatory consumption changes, employment in the 
aircraft (and other transport equipment) industry in defense-oriented 
states like California would be lower by as much as 88,000 than under 

a budget like type E ($93.6 bil.). However, under less severe 
assumptions about budget size and compensatory consumption expenditures, 
the estimated employment differential falls to 65,000, and the loss in 
the aggregate state employment total for all industries is estimated at 
82,000. Even in a defense-oriented state like California, however, 
the projections indicate that employment in some industries would 
actually increase as defense budgets are decreased. 

Concern has been expressed that employment problems would be 
acute at the SMSA level for some SMSA’s, such as San Diego, which are 
heavily dependent upon military spending,in the event that such spend¬ 
ing is reduced.^ Table 11 indicates that such concern could well be 
justified for San Diego, where unemployment might rise to the 8 or 9 
percent level, even under defense BudgetE ($93.6 billion). Under lower 
levels of national defense spending, the unemployment estimate for San 
Diego is in the 10 percent vicinity, whether or not compensatory con¬ 
sumption increases are assumed. It is not surprising to discover that 
the smaller the regions examined, the greater is the vulnerability to 
defense cutbacks. Because defense-related activities are not evenly 
distributed geographically, finer dimensions of regions can be ex¬ 
pected to reveal greater differences among regions. 

The overall implications of these estimates are consistent with 
the findings in other studies that, while the U.S. national economy 
could easily adjust to substantial reductions in military expenditures, 
some defense-related industries would experience sharp economic impacts, 
and some states and metropolitan areas where these industries are 
dominant would experience economic readjustment problems. However, 
there is no evidence to suggest that these regional economic adjustment 

28 

Similar estimates for 219 SMSA ! s are available upon request 
from the Economics Bureau, U.S. Anas Control and Disarmament Agency. 

29 

See, for example, the Wall Street Journal , November 28, 1967, 
quoting an estimate of an increase in unemployment from 3.7 to 7 per¬ 
cent in San Diego in the ensuing 18 months. 


204 




ACDA/E-156 


problems would be sufficiently widespread- or serious that they could 
not be dealt with by existing policy measures and others which might be 
designed to meet the problem. 

IV.1.5 Evaluation of the Regional Projections 

The regional impact estimates in this study have been based upon 
two stages of analysis. The first phase required making national 
interindustry projections of the impacts of alternative defense budgets 
upon national GNP, employment, industry output, and other variables. 

In the second stage of analysis, the national interindustry employment 
estimates from phase one were allocated geographically by a separate 
regional model between states, and the state control totals were then 
allocated among SMSA's and counties. 

This procedure has a number of advantages, and some disadvantages. 
A major advantage of this approach is that the national interindustry 
model used is capable of analyzing all of the economic impact dimensions 
which were described as essential to a full evaluation of the economic 
impact problem. The national interindustry model takes account not 
only of direct economic impacts (the defense budget), but also expli¬ 
citly computes its effects upon indirect and induced impacts. The 
national interindustry model is based upon explicit statements of 
structural relationships in the national economy, and takes account of 
technological change over time. It uses dynamic general equilibrium 
theory to generate disaggregated industry output estimates which are 
consistently related to GNP accounts. Both the industry estimates and 
the totals resulting from them appear to respond consistently to 
changes in assumptions about the size and composition of military ex¬ 
penditures. These alternative defense expenditures, in turn are 
treated as part of total final demand, and the model allows for real¬ 
istic internal adjustment and response to changing final demand 
assumptions. 

Thus, while the national model shares all of the important advan¬ 
tages of interindustry models, of which it is a very advanced version, 
it also necessarily shares the well-known shortcomings of these models. 
Most of the structural relationships in the model are based upon the 
assumption of linear, homogeneous production functions. The model 
cannot easily deal with basic economic phenomena such as factor sub¬ 
stitution and relative price change. The accuracy of interindustry 
projections is heavily dependent upon the accuracy of final demand 
projections. However, progress is being made in dealing with these 
problems, which are of acceptable magnitude, given the other capabili¬ 
ties of the model. 


205 



ACDA/E-156 


The regional model employed for estimating the regional economic 
impacts of changing defense expenditures has the advantage that it begins 
with a consistent and reasonable set of detailed estimates of national 
economic impacts, which it then allocates geographically. The regional 
model has the impressive capability of being able to make detailed indus¬ 
try employment projections for all 51 states, for all 219 SMSA*s and for 
all 3070 county-type areas in the U.S. The county employment estimates 
when summed are equal to the SMSA and state totals, and the state 
totals add consistently to the U.S. employment totals. 

The geographic allocation of economic impacts in the Harris 
regional model is based upon observed historic trends in industry 
location, population changie, migration, and interindustry relationships. 
The projections derived from it appear to be consistent with general 
economic theory and regional analysis. The model allows for changes in 
population and labor force in response to changes in levels of economic 
activity and employment opportunity. 

However, the process of making regional (and national) economic 
projections is necessarily subject to a multitude of difficulties, and 
the regional projections derived in this study contain limitations 
which must be explicitly examined. Although some of the limitations of 
the regional projections result from the particular model employed, 
most of the shortcomings are those which are inherent in any effort to 
make regional economic projections. 

f 

First, it has already been observed that the probability of error 
in economic projections is inversely related to the size of region. It 
must be assumed that the probability of error is greater in the county 
and SMSA projections than in the state projections and is greater in 
state projections than in the national projections. Similarly, though 
the national interindustry projections are strengthened by disaggregat¬ 
ing into sector detail so that structural relationships may be analyzed, 
the individual industry projections contain a higher probability of 
error than do the totals for any region—nation, state, or county. Con¬ 
sequently, even though the 20 industry level of detail used in the 
regional projections is so aggregative that it masks probable impacts 
of changing defense expenditures, further breakdowns into more detailed 
defense industry detail, though desirable, would create other kinds of 
disaggregation problems. 

Another problem with the particular model used is that it does 
not utilize some of the regional data which are available. It does not 
incorporate information on the geographic distribution of the direct 
effects, or on the initial location of defense expenditures. That is, 


206 


ACDA/E-156 


the spatial distribution of final demand is assumed to be endogenous 
within the model, at its present stage of development. Extension of the 
model to use the increasing amount of empirically observed data on 
geographic distribution would be a logical addition to it. Another 
limitation of the model is its omission of any explicit information on 
interregional trade coefficients. These data are severely limited in 
availability and reliability. Their systematic collection is a 
necessary next step in improving the analysis of regional economic 
impacts of defense expenditures and other programs. 

However, despite these and other problems, the approach used here 
represents important advances in the state of the art and illustrates 
what can be achieved with currently available data and operational 
models. The Harris regional projections model and others are con¬ 
stantly being extended and improved. The next section will explore 
some of the opportunities and problems involved in advancing the quality 
of regional economic projection. 

IV.1.6 Improving Future Regional Economic Projections 

Despite recent advancements in the field of regional economic 
analysis and forecasting, it is clear that much improvement is required 
in data, in concepts and in methods. Most of the highest priority 
national policy issues such as urban problems, regional development, 
and environmental quality, as well as the issue examined here of 
regional impacts of defense spending involve spatial relationships and 
require analysis of interregional flows of goods, services and people. 

Increased effort to improve regional economic projections can be 
predicted on the basis of the history of national economic information 
systems, as well as on the basis of response to growing national needs 
for regional analysis. The national income accounts system and other 
economic information systems have consistently moved towards inclusion 
of greater industrial detail, and more detailed geographic breakdown. 

The value of national income data for problems of analysis and policy 
rapidly led to development of personal income data, first for states, 
and then for SMSA's and counties. The evolution of national inter¬ 
industry models and the growing awareness of their analytic signifi¬ 
cance suggests that similar models for states, metropolitan regions, 
and smaller regions will evolve as part of the Federal economic infor¬ 
mation system. The vast amount of effort and expenditure being devoted 
to development of these models by many scattered and uncoordinated 
efforts indicates both the need for such models and suggests that a 
coordinated Federal effort to develop regional interindustry models 
could economize on the total amount of resources being devoted to such 
efforts and could improve the quantity and quality of the product. 


207 


ACDA/E-156 


Evidence of the need for a national (iffort to provide consistent, 
accurate regional interindustry tables is suggested both by the growing 
efforts to develop non-survey methods of producing such tables economi¬ 
cally, and by the substantial efforts going into the development of 
regional tables by direct survey. Interindustry tables have been 
completed, or are under way, for more than 30 individual states and for 
many sub-state regions.30 The regional interindustry approach to 
regional analysis and forecasting is promising because it does combine 
the advantages of a disaggregated genera] equilibrium system which can 
capture all of the direct, indirect, induced, and dynamic elements 
which have been identified as inherent in the problem. The development 
and publication of standardized, reliable interindustry tables for 
states and SMSA ? s by the Federal government would be a logical next 
step in the evolution of economic information systems which would 
probably pay their own way in terms of improved information relevant 
to decision making on high priority public policy issues. Centralized 
design and data collection for such tables could also lead to the next 
important step in the evolution of regional analysis, which is the 
linking of these regional interindustry tables into interregional 
models. These interregional models are essential in order to analyze 
the basic problem of interregional economic flows, about which so 
little is known. Efforts are also necessary to evaluate alternative 
concepts and models for the analysis of interregional flows. 

Advancement of capabilities for making regional economic analyses 
and fprecasts will require improvements along many paths preferably 
within a systems framework so that the information components are 
consistent with an overall approach designed to achieve its objectives. 
First of all, significantly improved data on direct impacts of defense 
and other expenditure programs are needed. Among the important 
characteristics of such direct impact expenditure data are that they be 
specified in disaggregated industry detail according to a consistent 
industry classification system used in the analytic model, that the 
data be disaggregated geographically by region, and that they be identi¬ 
fied in terms of the expenditure program which they support. 


For discussion of nonsurvey approaches, see William A. Schaffer 
and Kong Chu, "Nonsurvey Techniques For Constructing Regional Inter¬ 
industry Models,*' Papers, The Regional Science Association , Volume 
Twenty-three, 1969, pp. 83-101. For a recent inventory of regional 
interindustry models underway and completed, see Phillip J. Borque and 
Millicent Cox, An Inventory of Regional Input-Output Studies in the 
United States (Seattle: University of Washington, Graduate School of 
Business Administration, Occasional Paper No. 22, 1970). 


208 







ACDA/E-156 


The long-awaited publication by the Office of Business Economics 
of the enlarged OBE Interindustry Sales and Purchases model for 1963^ 
provides an industry classification system which can be used as a 
current model of industrial disaggregation for a wide range of analytic 
purposes, but which can be aggregated or further disaggregated on the 
basis of the four-digit SIC classification as needed. 

As indicated, the direct impact data to be used in such models 
should be disaggregated by industry, region, and program to which they 

pertain. References above to direct impact data from DOD and 0E0 

indicate that while a vast amount of information is available, it is 

not in a form which is most useful for analytical purposes, nor does 
it appear to have been assembled within any consistent information 
system design. Movement towards a systems approach in the Federal 
statistics establishment could, as a minimum, encourage every agency 
to report its expenditures and budget requests in terms of SIC category, 
location of expenditure, and program category. 

Because the DOD budget is the largest Federal expenditure compo¬ 
nent, particular effort is. needed in overcoming problems in the analysis 
of defense expenditure. Overclassification of expenditure data is a 
major problem with DOD statistics, but the publication referred to above 
containing prime contract award data for individual firms in minute 
detail indicates that there is little consistency in reporting proce¬ 
dures. If it is an important element of national interest to be able 
to analyze the industrial and regional impact of defense policy, 
serious efforts are necessary to obtain consistent DOD expenditure 
information by SIC industry, geographic area, and program category, 
to the extent that this can be done without compromising national 
security. 

Further improvements in reporting of DOD expenditure data are 
essential to the assessment of economic impact, particularly in the 
area of consistent reporting of subcontract systems. There is no 
logical reason why each prime contract should not be assigned a serial 
number which could be reassigned with appropriate sub-titling to each 
tier of subcontracting and other inputs so that the total industrial 
and regional purchase patterns for each prime contract could be follow¬ 
ed through consistently. This is well within the capability of computer 
information systems and could provide valuable management information 
as well as economic impact data. 


National Economics Division, Office of Business Economics, U.S. 
Department of Commerce, "Input-Output Structure of the U.S. Economy: 
1963," Survey of Current Business , Vol. 49, No. 11 (November, 1969), 

pp. 16-47. 


209 




ACDA/E-156 


Another major need which is critical, not only in improving 
regional impact analysis, but also for the advancement of regional 
analysis in general, is the collection of interregional economic 
flow data. Much more information is needed on the gross as well as 
the net flow of materials and services from each region to each 
region by industry classification. The usual dependence upon I. C. C. 
Waybill samples provides only a fraction of the data needed on flows by 
all types of transportation between regions. The Census of Transpor¬ 
tation offers the best opportunity for obtaining such data, which 
should be related to a consistent information framework. Only the 
collection of such data will provide the empirical basis for con¬ 
structing truly interregional (as compared with regional) interindustry 
models. Interindustry models are not necessarily the only type of 
interregional models which are potentially useful for exploring spatial 
problems, and experience is needed with other types of interregional 
models. However, the systematic collection of data on interregional 
flows of goods, services, people, and externalities is a necessary 
next step towards the implementation of the interregional models needed 
for the improved analysis of problems in post-Vietnam adjustment, urban 
renewal, regional development, and environmental quality, in all of 
which space is a critical dimension. 


Current approaches reported in this study towards construction of 
interregional interindustry models by means of simulation, scaling and 
other short cuts all indicate the need for such models. The work of the 
Isard group and of the Harvard Economic Research Project, the continued 
refinement of the Harris regional projections, and the improvement of 
the QBE regional information system all suggest that the systematic 
collection of disaggregated interregional interindustry flow data is an 
essential step towards the next generation of advancements in regional 
analysis. 

IV. 2 EXISTING PROGRAMS AND RECOMMENDATIONS FOR ALLEVIATING REGIONAL 
ECONOMIC IMPACTS FROM REDUCTIONS IN DEFENSE EXPENDITURES 


IV.2.1 Economic Development Administration 

Because this study and others have indicated that substantial re¬ 
ductions in defense expenditures could have economic impacts that would 
be particularly severe for some regions and for some activities within 
these regions, it is important to assess policy measures which are now 
available to deal with these problems, and alternative policy measures 
which might be designed. 


For example, the chapter in this study by Robert Crow on the 
Northeast Corridor is a non-interindustry model concerned with the 
regionalization of impacts. 


210 



ACDA/E-156 


While almost all U.S. government programs affect regional 
development in some way, particular agencies, such as the Economic 
Development Administration (EDA) have been given specific responsi¬ 
bility for dealing with regional economic development problems. EDA 
is authorized to use a variety of programs for assisting regions which 
experience high unemployment and low per capita incomes resulting from 
any cause, including reductions in military expenditures. 

One of the most appropriate measures already available for 
dealing with regional dislocation resulting from reductions in defense 
expenditures is the ?? sudden rise*' provision of the EDA legislation.^3 
This provision is particularly relevant to the defense expenditures 
reduction problem because it permits EDA to designate an area as 
eligible for assistance if the loss of a major source of employment 
threatens to cause an unusual and abrupt rise of unemployment in the 
region. Therefore if a reduction in defense-related employment occurs 
and it appears likely that there will be problems In adjusting to this 
employment loss in the region, assistance can be given to the region 
in anticipation of an unemployment increase® 

This is an important provision because it recognizes that while 
many instances of the loss of a major source of employment can be 
ameliorated by the adjustment capabilities of the national and regional 
economies, some regions are more vulnerable than others and measures 
can be taken to anticipate sudden rises in unemployment and provide 
regional economic assistance. As of December, 1970, more than 60 areas 
had been certified as eligible for EDA assistance under the sudden rise 
provision. While some of these were later removed from the eligibility 
list it is not known to what extent such removals reflected successful 
corrective action as compared with the effects of market forces. 

The "sudden rise** provision lends additional importance to pre¬ 
dictive models for early warning of regional impact of expenditure 
changes. The Harris model discussed in this study is a promising example 
of such a regional early warning model. Refinements now being added to 
the model, including more industry detail and regional supply and demand 
functions, which should permit closer approximations to interregional 
interindustry models, should increase its reliability as a forecasting 
device. However, the necessity to forecast regional and national final 
demands will continue to impose a constraint on the reliability of the 
output and employment forecasts from such models. 


, 3 Public Worke rs and Economic D evelopment Act of 1965, As Amended , 
Title IV - Area and District Eligibility, Part A, Redevelopment areas. 
Section 401 (a) (4). 


211 







ACDA/E-156 


IV.2.2 State and Local Governments 

In addition to the Federal government, state governments can also 
take useful steps in planning for and adapting to economic readjustment 
to changes in defense expenditures. The United States Arms Control and 
Disarmament Agency (ACDA) has played a leading role in identifying 
opportunities for state and local governments to assist in the regional 
economic adjustment process, and in encouraging them to develop pro¬ 
grams and capabilities for meeting such contingencies. As early as 
1964, ACDA contracted with the National Planning Association (NPA) to 
evaluate problems of community adjustment to changes in defense expen¬ 
ditures. Case studies were later published for the Seattle-Tacoma, 
Baltimore, and New London-Groton-Norwich areas.^ On the basis of 
these case studies, NPA made a number of recommendations concerning 
policy measures for the Federal government, for state and local govern¬ 
ments, and for business firms and unions in dealing with regional 
adjustment to arms reduction which are still valid. These recom¬ 
mendations and the general policy conclusions of the NPA study are 
contained in Appendix A. 

More recently NPA has developed for ACDA a comprehensive com¬ 
munity information system designed to assess the potential sensitivity 
of a community to changes in defense activities and to assist local 
policy-makers* to anticipate and adjust to these changes. ' A large 
body of literature on the theory and practice of regional economic 
adjustment to changes in defense expenditures is available primarily 
as a result of research supported by ACDA. b 


34 

National Planning Association, Community Adjustment to Reduced 
Defense Spending , U.S. Arms Control and Disarmament Agency Publication 
No. 33 (Washington: Government Printing Office, 1965). 

35 

National Planning Association, Community Information System: A 
Method for Evaluation of Community Dislocation Sensitivity and Adjust¬ 

ment Potential , Vol. 1, Prepared for the U.S. Arms Control and Disarma¬ 
ment Agency (Washington: Government Printing Office, ACDA/E-88, 1965). 
Volume VII of this study provides an example of the application of the 
information system to San Diego. 

36 

U.S. Arms Control and Disarmament Agency, "Economic Impact of 
Defense and Disarmament in the United States," Research supported by 
the Economics Bureau, ACDA ? Washington, February, 1970, processed. 


212 








ACDA/E-156 


In addition to Federal efforts, state and local governments have 
begun to conduct their own studies of regional economic adjustment to 
changes in defense expenditures. A New York State study has recommended 
that the Governor appoint committees to plan for post-Vietnam adjust¬ 
ment at the state and local levels for determining priorities and timing 
of capital expenditures and other measures.' 7 

The State of Maryland has undertaken a very detailed analysis of 
all available information on the direct effects on employment of 
defense expenditures in Maryland. The report recognizes the need for 
analytic models to evaluate the additional -indirect and induced employ¬ 
ment associated with the direct employment from defense expenditures 
and makes a number of policy recommendations. In addition to improved 
data collection, it recommends analysis of the skill composition of 
defense employment, the establishment of temporary field employment 
offices at installations scheduled to reduce or close operations, and 
establishing a priority list of Federal, state and local projects as 
an offset to defense-related employment reductions. 

The Harvard Economic Research Project, which is referred to 
elsewhere in this report, has prepared an excellent study for Massa¬ 
chusetts of the projected impact of changes in Vietnam expenditures 
upon the economy of Massachusetts.*^ 

Following the traditional Leontief procedure of developing 
regional interindustry models by distinguishing between national in¬ 
dustries and local industries, the Harvard group has utilized a multi- 
regional, subnational interindustry model for Massachusetts, using 
1958 national interindustry coefficients and 1967 estimates of final 
demand under various assumptions about military expenditures. The 
alternative defense expenditure assumptions are: (1) actual 1967 
gross output by industry, (2) assumption that Vietnam expenditures 
decrease by 19 billion dollars with no compensatory spending increase 
by government or private sectors, (3) an assumption of a Vietnam 

37 - * ~ ~ • — — 

Post Vietnam Planning Committee, P lans for New York State to 

Meet the Economic Consequences of Peace , Report to Governor Nelson A. 

Rockefeller (Albany, New York: The Committee, December 18, 1968). 

38 

James T. Jordan, National Defense Related Employment in Mary¬ 
land: 1965-1969 (Baltimore, Maryland: Maryland Department of State 
Planning, Publication No. 163, May, 1970). 

39 

Commonwealth of Massachusetts, Vietnam Economic Reconversion 
for the Commonwealth of Massachusetts , Department of Commerce and 
Development in cooperation with Governor’s Advisory Committee on 
Science and Technology, Boston, Massachusetts, August 1968-September 
1969. 


213 












ACDA/E-156 


spending cut of 19 billion dollars with compensatory spending consisting 
of a uniform 3.4 percent increase in private sector spendings, and (4) 
calculation as in assumption (2) with alternative spending as follows: 

(a) a uniform 1.3 percent increase in private sector expenditures, and 

(b) an 11.5 billion dollar increase in public civilian sector programs. 


The results of the Massachusetts study suggest that this state 
is particularly vulnerable to a decrease in military expenditures. 

Even with compensatory increases in private spending or government 
spending, Massachusetts would have a small net decrease in labor 
earnings of nearly 1.5 percent. Using the multiregional model develop¬ 
ed, the study also identifies net declines in other regions such as 
Georgia, and North and South Carolina; Maryland, Virginia, West 
Virginia, Delaware and the District of Columbia; Florida; Texas; Utah, 
Colorado, New Mexico and Arizona; Oregon and Washington; and California 
and Nevada. The study also shows for the 57 industries involved, how 
each would fare under the assumed increases in public civilian sector 
programs as compared with increases in private consumption. The 
industries are divided into national, regional, and local industries, 
depending upon the region for which exports and imports are balanced, 
as between these regions. The results of the model are expressed in 
terms of percentage losses or gains in wages and salaries for each 
of the 57 industries in each of the 17 regions. 

Despite the fact that it is based upon 1958 coefficients derived 
for the national economy and the fact that the division of industries 
into national, regional, and local is somewhat arbitrary, the Harvard 
Economic Research Project-Massachusetts model is an impressive and 
sophisticated application of interindustry techniques to the analysis 
of the interregional impact of changing defense expenditures. The 
conclusions drawn from this study are in general consistent with the 
findings of other investigators. They suggest that while the U.S. 
economy can absorb anticipated reductions in Vietnam spending without 
unbearable increases in total unemployment, the introduction of offset 
programs can be helpful in reducing unemployment. Some industries and 
some regions can be expected to suffer greater losses than the national 
average, but some can be expected to be less affected. 

The availability of empirically observed interregional, inter¬ 
industry flow data would permit significant improvement of such models 
and collection of this kind of data should be given top priority in 
efforts to improve impact analysis. 


214 



ACDA/E-156 


IV. 3 POLICY CONSIDERATIONS IN THE ALLOCATION OF RESOURCES 

RELEASED FROM MILITARY USE 

IV.3.1 Area Development: Urban, Regional and Related 
Programs 

The projections made in this study indicate that, while the 
national economy is capable of adjusting even to severe reductions in 
defense expenditures, some regions and some industries would face 
appreciable economic readjustment problems. It is therefore important 
to develop national policies and programs capable of dealing with 
problems of regional economic adjustment. Post-Vietnam regional 
economic adjustment programs can be most effectively handled within the 
context of a comprehensive national policy^for coordination of regional 
development efforts. 

IV.3.2 A National Policy for Regional Development, 

Resource Management, and Environmental Quality 

There are a number of elements which could contribute to the 
establishment of a strong, positive national policy on regional and 
urban development. An important first step would be to give priority 
to solution of the human problems which result in low productivity. 
Major emphasis in regional and urban development policies upon educa¬ 
tion, training, health, family planning, and family assistance would 
eventually help assist individuals to achieve the mobility and adapt¬ 
ability needed to respond to changing economic opportunities. The 
proposals for Federal revenue sharing with the states is an important 
move in this direction. Not every region can hope to achieve levels of 
economic activity required to support acceptable levels of public 
services. Federal revenue sharing to improve the quality of human 
capital in lagging regions could eliminate many of the regional in¬ 
equities which now exist. u Similarly, sharing of state revenues with 
the less affluent regions within states could reduce intrastate 
inequities. 


40 

For a detailed examination of revenue 
on that subject by Darwin Daicoff elsewhere in 


sharing, see the chapter 
this study. 


215 






ACDA/E-156 


Expanded revenue sharing could aIs) help to improve the quality 
of interregional economic competition. States dependent upon industrial 
growth to support public sector services devote major efforts to compet¬ 
itive attraction of industry. This policy can become self-defeating if 
states grant tax concessions to new industry large enough to cancel the 
fiscal gain which was the original objective. Also, interregional 
competition for industrialization induces some states to engage in 
competitive relaxation of pollution control standards. Establishment 
of minimum national standards for pollution abatement would put all 
states on an equal basis in this regard and enable states to compete 
more constructively for economic development. With revenue sharing and 
strong Federal pollution control programs, states might then compete 
for regional development on other bases, such as the quality of public 
services offered, quality of amenities, and productivity of labor. 

Interstate and interregional competition for economic develop¬ 
ment and for support of public services can force regions into mis¬ 
management of local natural resources. The systematic mismanagement in 
Appalachia of the timber, coal, water, and human resources is a tragic 
example of the cost of unplanned regional development. A possible 
TnkthOT^for avoiding Tuture~repe fit ions of the Appalachian experience 
would be to adopt a policy of life-cycle planning in natural resource 
management. This would require that developers of major resource 
systems prepare and submit prior to the exploration of resources, a 
responsible life-cycle plan for the exploration, extraction, and 
eventual restoration of the area affected. In strip mining, for 
example, this policy would require that developers prepare and adhere to 
an approved plan to extract the minerals without damage to the sur¬ 
rounding air, water, or soil, and then restore the surface after removal 
of the resource. This policy would be designed to bring private cost 
into line with social cost in order to improve resource allocation. 

The adoption of life-cycle planning and more responsible resource 
management policy appears to be particularly urgent as the nation 
embarks upon major programs of natural resource development in the case 
of ocean resources, shale oil recovery, and petroleum production in 
Alaska. The lessons of the Appalachian experience and of the Santa 
Barbara oil spills can be used to prevent mismanagement on a monumental 
scale of these new resource systems. 

• r 

Another vital concept which can significantly improve the quality 
of regional, urban, and national economic development planning is the 
concept of advanced technology assessment and review. While technology 
has played a vital role in economic development, some technologies 


216 






ACDA/E-156 


appear to have been introduced on a large scale before they have been 
sufficiently refined and before their full implications for society 
have been assessed. For example, it might have been desirable to 
specify more rigorous emission standards for the automobile engine 
before it became so widespread. If noise limitations had been estab¬ 
lished for supersonic transports early in their development, research 
efforts might have discovered more effective noise suppression methods. 
Nuclear energy for electric power production is highly promising, but 
failure to consider the process as a total system before its widespread 
introduction has created serious problems of increasing exposure to 
radioactivity in the mining of uranium, in the disposal of mine tail¬ 
ings, in the processing and transport of fuel elements, in the power 
generation stage, in reprocessing of fuel elements, and in the stor¬ 
age and disposal of spent fuel. Thermal waste from nuclear power 
generation is also a serious and growing environmental problem. Despite 
the advantages of nuclear energy, those regions in which it has been 
introduced might be much better off if an independent technology 
assessment agency outside the mission-oriented Atomic Energy Commission 
had set up total system safeguards and standards before the large scale 
introduction of atomic energy was permitted. The introduction of DDT 

and other environmental chemicals before comprehensive evaluation was 
required is another example of the hazards of unevaluated technology. 

As new and more powerful technologies are developed, the importance of 
technology assessment and review before introduction becomes more 
urgent and essential. 

The adoption of effective national programs to deal with regional 
and urban poverty, resource management, and environmental quality would 
go far towards alleviating some of the most urgent problems of regional 
development. However, even these programs are not likely to add up to 
a coherent national policy on regional development unless strong, posi¬ 
tive national guidelines are established. Traditional programs of 
leaving Federal funds for regional development to be expended on the 
basis of local decision making are unsatisfactory because of subopti¬ 
mization, creation of external diseconomies, and because of non¬ 
productive methods of interregional competition. 

In order to reorient regional development programs away from 
emphasis upon quantitative growth and towards quality of development, 
it will be necessary to establish strong national guidelines that will 
permit a Federal-state-local system of regional development to function. 
Centralized Federal decision making will be necessary on issues which 
affect the national interest, such as environmental standards, popula¬ 
tion growth, technology assessment, transportation systems and major 


217 


ACDA/E-156 


natural resource systems including estuaries, water sheds, the conti¬ 
nental shelf, the electric power system, poverty abatement, new towns, 
and similar issues on which subnational decision-making is likely to 
be suboptimal. 

The traditional approach to regional development in the U.S. 
has been to encourage each region to compete with all others to 
achieve maximum rates of economic development. This policy, which was 
highly appropriate and successful under earlier conditions, is becom¬ 
ing obsolete and costly under emerging conditions of rapid population 
growth, extensive urbanization, intensive industrialization and the 
advent of more powerful technologies. The national interest is no 
longer best served by encouraging maximum growth in every region, 
particularly along flood plains, in areas of seismic activity, water 
shortage, recurrent fire hazard, unstable soil conditions, or in forms 
which jeopardize recreation areas, wilderness areas, water supplies, 
and vulnerable ecologies. National guidelines are necessary both in 
order to prevent economic loss and to protect scarce national resources, 
to minimize external diseconomies, and to maximize external economies. 
Therefore, although the traditional autonomy of local areas in physical 
planning, zoning, and land use regulation will remain important, with 
the increase in scale of technology and spread of externalities, it will 
become necessary for states to play a larger role in physical planning 
than they have in the past, ^n order to protect the public interest 
in land use, natural resource management, and environmental protection, 
it will become increasingly important to require state approval of local 
development plans to assure consistency with broad state development 
objectives. Similarly, Federal approval of state development plans to 
assure consistency with national guidelines will become increasingly 
essential as a prerequisite to the granting of Federal funds for 
regional development. 

If Federal and state revenue sharing down to the local level 
is adopted, local areas can then be released from the pressures they 
now feel to accelerate the intensity of growth in order to finance 
local public services, regardless of whether they might prefer lower 
intensities of development and rates of growth. With more equitable 
revenue sharing, local areas could then reallocate some of the dis¬ 
proportionate and self-defeating efforts going into the competitive 
quest for industrial development and turn their attention to broader 
issues of general regional development and improving the quality of 
life and environment for their citizens. 


218 


ACDA/E-156 


There are other important problems of regional development which 
have not been discussed here, and many areas on which further research 
is required. However, recent developments in regional analysis, in 
program planning and budgeting systems, and in the design of social 
accounts support the idea that it is now possible to design a national 
policy for regional and urban development which would be responsive to 
current priorities and to changing national goals. 


219 


ACDA/E-156 


IV.4 APPENDIX A 41 

GENERAL POLICY CONCLUSIONS FOR 
REGIONAL READJUSTMENT TO ARMS REDUCTION 


The study results in this chap ter*"*™ general conclusions based on 
our research findings and a list of policies and programs offered for 
consideration by government and private organizations-—are tentative. 
They are based mainly on an intensive study of three metropolitan 
areas, a review of studies of a number of area dislocation experiences, 
and an analysis of regional economic and defense expenditure trends. 
They are presented here to suggest where additional thought and re¬ 
search might be concentrated. 

Our primary conclusion is that the dislocation caused by arms re¬ 
duction plans of the size assumed in this study would be manageable 
but would aggravate the national task of promoting a desirable rate of 
economic growth. The dislocations for certain regions are likely to 
be serious. However, under conditions of uninterrupted national 
expansion of markets, there is reason to believe that business enter¬ 
prises will offer jobs to most displaced workers. Both with respect to 
the ability to continue national economic growth and to make needed 
regional adjustments, confidence is justified only if a dynamic policy 
is planned well in advance by government on all levels and by private 
enterprises concerned. Even assuming such advance planning, there will 
remain hardship for some workers, and difficulties for some firms and 
some communities. Private and public measures to mitigate hardship 
would be needed. 

In the event of a faster or deeper arms reduction than assumed in 
this study, a temporary setback in our efforts to maintain economic 
growth and purchasing power may occur. This would also aggravate 
regional dislocations and impede the processes of adjustment. It 
should be emphasized, however, that advance planning by private 
business and by Federal, state and local governments is essential in 
every case. 


41 

Source: National Planning Association, U. S. Arms Control and 
Disarmament Agency Publication 33 Community Readjustment to Reduced 
Defense Spending (Washington: Government Printing Office, December, 
1965), pp. 247-259. 


220 





ACDA/E-156 


General Policy Guidelines 

First, we found that community leaders and business are, under 
present world conditions, skeptical about the likelihood of arms re¬ 
duction and the need for serious planning for adjustments. However, 
to reduce later costs of promoting readjustments and mitigating hard¬ 
ship, advance planning is required. Therefore, a clear statement by 
the Federal government about the need for planning for arms reduction 
appears desirable, irrespective of its actual probability. 

Second, we found some expression of the attitude that it is the 
duty of the Federal government to assure that markets and jobs are 
provided to compensate for loss of markets and jobs in case of arms 
reduction. It is desirable that the Federal government also make it 

clear that, in the event of arms reduction, it will pursue a policy 

promoting growth and maintaining purchasing power for the economy as a 
whole, as it is required to do under the Employment Act. Such a 

statement should clarify to what extent the Federal government is or 

is not obligated to assist individual enterprises and specific regions. 
Wa assume that the readjustment of individual enterprises would remain 
primarily their responsibility but that the Federal government would 
assist communities to the extent that the task of readjustment and 
mitigating hardship exceeds community financial capacity. However, 
in every case, the community would presumably remain primarily res¬ 
ponsible for the planning and the implementation of readjustment 
programs. 

As a third guideline, both national and regional policies of the 
Federal government designed to meet arms reduction impacts should be 
dovetailed with broad national programs, such as those for maintaining 
economic growth and purchasing power and expanding education, urban 
redevelopment, the war on poverty, worker assistance, and improved 
international relations.^ To achieve this consistency and to meet 
regional problems,, readjustment policies for meeting reductions in 
defense spending should be blended with policies to promote adequate 
economic growth and with policies to assist in readjustments for other 
dislocations, such as those resulting from automation. 


4 *rhe "Ackley Report'* by a Federal interdepartmental committee 
(the Committee on the Economic Impact of Defense and Disarmament, 
Gardner Ackley, Chairman) has reviewed the implications of disarmament 
for the economy as a whole. The Economic Impact of Defense and Dis¬ 
armament (Washington: Government Printing Office, July, 1965). 


221 








ACDA/E-156 


As a fourth general policy guideline, any extraordinary Federal 
readjustment programs should preferably be nondiscriminatory with respect 
to all causes of hardship, whether it be from arms reduction or any 
other situation. This nondiscrimination is important for several 
reasons. First, it would be difficult in a period of significant arms 
reduction impact to identify each affected community, business firm and 
defense worker. Defense activity in its indirect effects ripples 
through the nation*s industrial and regional structure. From the view¬ 
point of equity, giving readjustment aid to those directly affected by 
arms reduction and not to those indirectly affected or replaced by other 
causes would be questionable. To try to limit such aid to direct and 
indirect defense-related work would result in a fruitless attempt to 
define and identify the groups affected and there would still be unequal 
treatment of dislocations taking place in nondefense industries. Also, 
limiting legislation for extraordinary Federal assistance to specific 
regions or a specific time period would not be satisfactory. It is far 
preferable if the Federal government is authorized to establish, pro¬ 
vide financial or technical aid for, or cooperate with programs for 
extraordinary assistance due to distress, irrespective of the cause 
of distress. 

Our research on the three selected areas and review of other case 
studies of area dislocation suggest that there are now shortcomings in 
the kinds of assistance available to unemployed workers, e.g,, through 
the employment service and in unemployment benefits. We recommend a 
re-examination of manpower and unemployment assistance policies from 
the aspect of their adequacy in 1) facilitating the adjustment process 
and 2) mitigating situations of distress until the adjustment has been 
made. If the nation is not equipped with better machinery at all levels 
of government for dealing with unemployment dislocations, it may become 
necessary to adopt less desirable temporary emergency measures assist¬ 
ing individuals especially hard hit by arms reduction. 

As a last general guideline, our studies indicate that there is 
a need for more advanced planning to deal with dislocation problems. 

This includes planning by the Federal government, state and local 
government, business, unions, and individual workers. There are 
several Federal programs which support planning at the regional level, 
including the 701 program of the Housing Act, one percent research 
funds on Federal facilities, investment programs, and the community and 
regional development programs of the Economic Development Administra¬ 
tion (EDA). Advance planning may enable many communities to set 
objectives and to prepare for use of their resources in such a way that 
defense cutbacks become an opportunity to meet community goals. 


222 



ACDA/E-156 


Possible Implementation of the. Guidelines 

In the balance of this concluding chapter, policies will be dis¬ 
cussed which could be adopted to implement the guidelines that have 
been suggested in the first part of the chapter. A part of these 
examples are drawn from previous chapters. These are not definite 
recommendations by the National Planning Association but rather should 
be understood as examples to illustrate the general policy implications 
of the guidelines. The specific policies or combination of policies 
that should be adopted in case of arms reduction depend on the speed 
and severity of arms reduction and especially on the general economic 
conditions prevailing at the time. 

A. Procedural Measures for the Federal Governments 


1. It would be desirable if the Federal government had at its 
disposal a mechanism by which the national and regional impact of 
specific arms reduction proposals could be evaluated within a short 
period of time. Such a mechanism would be desirable not only for the 
case of arms reduction but also for program appraisals in general. It 
would help to appraise the probable effects of increasing .or decreasing 
government programs in the perspective of national and regional economic 
projections. In the case of arms reduction it would provide estimates 
of the impact on production and employment and test the consistency and 
adequacy of Federal-state expenditure and tax programs with respect 

to their potential for offsetting reductions in defense spending. This 
mechanism could best be located in the Executive Office of the President 
and work under direction of the Council of Economic Advisers and the 
Budget Bureau. The office would be a service organization providing 
information for all agencies concerned with program development and 
especially for the officers who have to evaluate program proposals for 
the President and the Congress. 

2. A Manpower Administrator has been appointed in the Department 
of Labor. It would be desirable for the Administration to establish 

a unit with responsibility for covering manpower readjustment policies 
for meeting arms reduction problems. The announcement establishing 
the unit could include a statement of the Federal government’s in¬ 
terest in developing a coordinated set of Federal-state manpower 
policies which would aim at developing readjustment capability for 
defense workers. 

3. The U.S. Arms Control and Disarmament Agency might develop 
guidelines for planning by defense communities. On request of such 
communities, the agency might then participate in an advisory capacity 


223 




ACDA/E-156 


at meetings with communities, unions, and business organizations aimed 
at working up appropriate preparedness plans and policies. 

B. Policy Measures of the Fsderal Government 

i 

In case of arms reduction the Federal government might speed up 
certain programs in which it is engaged and possibly select for this 
purpose programs which deserve acceleration because of their intrinsic 
value but also because they may promote the use of scientists and 
engineers released from defense work and because they may possibly 
create employment opportunities in the areas hit by defense reduction. 
The list is presented without any judgment about the programs or pro¬ 
gram combinations which should be accelerated. General tax reduction 
as one of the main offsets for arms reduction is not discussed here 
because it has no particular regional aspect. 

1. Federal expenditure programs with differential regional indus¬ 
trial and occupational impacts (or ones that can be so oriented). 

a. Space research and technology : A program which requires 
large numbers of highly specialized scientists and engineers. There is 
high transferability into space activity for many specialized defense 
aircraft and missile scientists and engineers. 

b. Development of supersonic plane : Program for developing a 
supersonic plane could provide a limited number of jobs for defense 
aircraft scientists and engineers. 

c. Oceanographic researc h: Programs for research and explora¬ 
tion of the oceans and research programs for developing methods for 
farming the oceans (to obtain food) and for mining the oceans (to 
obtain metals). Many defense firms are already active in these re¬ 
search programs, 

d. Desalination research and facilities development : Research 
for the development of facilities to process water. Methods for pro¬ 
cessing both salt water and used water within the interior of the 
country are needed, 

e. Urban and interurban transportation and facilities de¬ 
velopment : Federal programs of research and development with state and 
local grant provisions to help solve our urban transportation problems 
and speed up interurban travel. Many defense firms consider themselves 
transportation equipment manufacturers first and defense firms second. 
Our surveys indicated interest by defense firms in this type of 
research and development. 

f. Research for improvement of housing, rehabilitation 
facilities and programs : It might be desirable to develop a broad 


224 












ACDA/E-156 


program of researca for development of low income housing, of mechanical 
devices and of other sorts of aid to mitigate the difficulties of handi¬ 
capped and older people in their daily functioning. This research 
might cover, for example, the development of aids and facilities to 
improve the mobility in and outside the home of the older person and 
the physically handicapped. It could include development of special 
types of houses. Other groups that could be aided are the mentally 
ill and culturally deprived. Programs for these people could be of a 
comprehensive type to enable them to function as effectively as 
possible. 


g. Research into the total problem of high density urban 
population concentrations: Defense firms with their systems capability 
might be drawn into the study of the i? total urban problem” which is a 
complex of air pollution, limited land and space, need for green 
space and quiet, need for improved esthetics in the environment, and 
need for hospital, medical, educational and recreational facilities. 

At a time when we emphasize meeting human needs and eliminating 
poverty, it may be prudent to develop some means to gauge what human 
needs are, or should be, in our highly compressed urban environment. 

h. International development programs : U. S. participation 
with individual nations and international organizations in develop¬ 
ment programs. Defense firms with their systems management and 
complex problem solving capability might be brought into this program. 

2. Federal assistance programs 

a. Liberalization of unemploypent benefits and enactment of 
Federal minimum standards : Existing state unemployment insurance laws 
vary widely and do not provide even 50 percent of a worker’s wage 
(which was the objective in the 1930’s). Standards of benefits and 
length of eligibility might be reviewed. 

b. Training and education programs for possible development 
by the Office of Education : Programs might include the following: 

(1) A program to facilitate the vocational readjustment 
of members of the armed forces who are discharged as a result 
of anas reduction. Handled through Federal-state relation¬ 
ship. 

(2) A program for retraining professional workers 
(including former defense managers and technicians). Long 
term loans covering university costs and family subsistence 
could be provided. Handled through Federal-state relation¬ 
ship. 

c. Retraining program for craftsmen for possible development 
by the Bureau of Apprenticeship, Department of Labor : Subsistence and 


225 















ACDA/E-156 


retraining payments for a program for retraining craftsmen whose skills 
have become obsolete could be handled through Federal-state relation¬ 
ship. 

d. Expanding operations of the U. S. Employment Service : The 
following might be considered: 

(1) Using data processing operations to supply job avail¬ 
ability information on a regional scale; also development of an 
expanded system for obtaining job vacancy information. 

(2) Skill testing and counseling services, particularly to 
help the younger and first-job seekers. 

(3) Broader training school referral capacity as well as 
increases in subsistence payments. 

(4) Special services for older, unskilled, nonwhite, and 
women workers. 

(5) Job relocation fund to include job-seeking trips when 
desirable. 

(6) Regular regional seminars on occupational needs for 
personnel directors of private companies. 

e. Development of job transferability information by Bureau 
of Employment Security : System would relate details of skill, mental 
ability, and physical ability to jobs defined by such requirements. Aim 
is increased job transferability, and, thereby, mobility. 

f. Earlier social security payments : When workers have 
serious deficiencies which make their readjustment and retraining 
highly improbable, an amended Social Security Act would make it pos¬ 
sible for these workers to receive social security benefits on certifi¬ 
cation by the U. S. Employment Service. 

g. Home ownership losses : A program to cushion losses result¬ 
ing from selling owner-occupied homes when the owner has to relocate as 
a result of unemployment might be developed. Study is needed to develop 
a program fair to all dislocated workers. 

h. Mortgage forbearance: A program might be developed which 
would permit mortgage forbearance when workers in a community face sub¬ 
stantial unemployment. Study is needed to develop an equitable program 
to all concerned. 

i. Income tax unemployment relief amendment : Study might be 
undertaken of a plan whereby a worker unemployed for more than three 
months may average previous year f s income with current year*s low or 
no income, recompute his tax, and request tax refund. (Certified by 
USES). 


226 









ACDA/E-156 


j• Contingency authority and contingency appropriations to 
Federal agencies : This would enable the President to speed up specific 
programs that Federal agencies already have underway. These programs 
would assist states and localities on a selective basis in the event 
of a serious dislocation impact. Covered under this contingency power 
would be the professional and craftsmen training programs, suggested 
above, under the Office of Education and Bureau of Apprenticeship, as 
well as the existing training programs under the Office of Manpower, 
Automation and Training. The aid programs of Small Business Adminis¬ 
tration are other examples of what could be used. 

k. Promotion of regLonal planning : Existing programs such as 
the urban renewal program and those developed under the Economic Deve¬ 
lopment Administration (EDA) could provide funds for planning, and some 
of these funds might be used by communities preparing for defense cut 
reductions. These funds could be used to set up "pipelines 11 of public 
works which could be quickly accelerated and to plan for development 
of "social utilities" in the community. Social utilities might include 
parks, libraries, beaches, day care centers, teenage camps, visiting 
nurse and homemaker services and recreation for the elderly. 

C. Defense Contract Policy 

1. It may be desirable for the Federal government to issue 
guidelines in regard to worker benefit allowances to mitigate worker 
readjustment difficulties that are allowable under defense contracts. 
These benefits might include: 

a. Permitting worker terminal leave pay benefits in defense 
contracts with the standards recommended by the President for civil 
service workers as a possible model, 

b. Establishing worker training and education program funds. 

c. In the case of private pension plans , investigating the 
possibility of full funding of liabilities as a terminal cost for 
Department of Defense contracts if vesting is stipulated. 

2. It might also be desirable to start a study of liquidation 
procedures. A technical study group could be established by the 
President to recommend procedures for meeting Federal government obli¬ 
gations to private firms in the event of an arms reduction agreement. 

Policies for Consideration by State and Local Governments 

The policies described below are of a more general nature than 
those listed for consideration by the Federal government because 












ACDA/E-156 


specific policy choices at the state and local government level will 
vary greatly depending on area characteristics, institutional make-up 
and many other factors. Policies offered for consideration below 
should be viewed as possible general approaches to readjustment pro¬ 
blems at the regional level. 

A. Leadership and Guidance Role 

State leadership and guidance might assist communities in prepar¬ 
ing for dislocations. It might provide a broader planning base (and 
could include regional planning), and for the smaller community, it 
could provide special assistance in coping with severe reduction in 
receipts from the defense activity which dominates a community. We 
wish to emphasize that local community planning is nonetheless still 
crucial and will probably determine how successfully the community 
makes its adjustments. 

B. Information Needs 


1. It would be desirable for state and local governments to com¬ 
pile information on the specific characteristics of defense and non¬ 
defense activity and employment in their areas, including state and 
local government activity. 

2. State and local governments might also investigate what grant 
and loan programs covering many different types of activity (research, 
education, road building, urban plaining, etc.) are available at the 
Federal level as well as the procedures for developing their own new 
programs. 

G. Policies and Programs 

1. It might be desirable for state and local governments to have 
a specific organizational unit or assistant responsible for handling 
the informational, liaison and other tanks in respect to defense spend¬ 

ing and possible arms reduction impacts on its area. This function has 
often been lost in broader functions of economic development groups. 

The responsibility for arms reduction work might be lodged in a govern¬ 
ment office or, as in the city of Baltimore, in a public Economic 
Development Commission, which has a subcommittee charged with this 
responsibility. 

2. Coordinator of community and state and Federal grant and local 
programs . It might be desirable for the community to have a coordina¬ 
tor as monitor between the planning group which sets the objectives and 


228 













ACDA/E-156 


programs and the city departments which are responsible for carrying 
them out within their jurisdiction. The coordinator's responsibilities 
might include monitoring the status of accelerated public works and 
other special ’‘pipeline*’ programs to insure that they are on a "start- 
up basis with funds available or provisions for obtaining them com¬ 
pleted. The coordinator might work closely with private local develop¬ 
ment groups and unions in working up and carrying out the community 
programs. 


3. Use of Federal land, plant or facilities . The community in 
concert with private local development groups and unions might take 
advantage of available land, plant, or laboratory facilities to be dis¬ 
posed of by the Federal government to develop a program for encouraging 
new enterprises to locate in the community. 

4. Unemployment insurance program . Unemployment insurance 
programs might be reviewed in respect to their adequacy in benefits 
and length of eligibility. 


Policies for Consideration of Business Firms and Unions 


A. Establishment of a Local Development Group 

Our brief review of past and recent area dislocation experiences 
suggests that areas without development groups usually set up such 
groups on an emergency basis when a shutdown occurs; then they make 
vigorous but emergency efforts to obtain alternative plant activities 
for the community or state. It might be desirable to have an estab¬ 
lished development group working within the guidelines of overall 
community objectives. 

B. Shift into Nondefense Work Activities by Business Firms 

Efforts by defense business firms to shift part of their operations 
to nondefense work might be intensified. Possibilities for nondefense 
government work could be explored with appropriate Federal, state, and 
local government agencies. 

C. Transfer of Personnel to Other Company Operations 

Broader transfer programs might be developed by defense business 
firms for the shifting of personnel from one division or plant of a 
company which is reducing operations or shutting them down to units of 
the company where there are job openings. The transfer program might 
attempt to cover, where possible, personnel below the top management 
and professional level. 


229 









ACDA/E-156 


D. Cooperation with Local Manpower Training and Employment Agency 
Programs 

Both defense business and union cooperation with the U. S. Employ¬ 
ment Service and in support of local manpower training programs to 
facilitate worker readjustments would be desirable, 

E. Retraining and Reeducation Provision by Defense Business Firms 

Arrangements to permit workers at all occupational levels to 
undertake retraining and reeducation to prepare themselves for possible 
job shifts might be considered by defense business firms. 

F. Interunion Cooperation in Worker Transfer 

It would be highly desirable if interunion arrangements could be 
developed to facilitate defense worker transfer from one job to another. 
This would involve review of problems of transferring, seniority and 
other rights and benefits, 

« 

G. Treatment of Dislocation Issues in Collective Bargaining 

Defense firms and unions might deal with possible dislocation 
problems, to whatever extent they can* in the collective bargaining 
process. Job transfer possibilities to other divisions of a company, 
worker retraining, terminal leave, and pension rights are some of the 
issues that might be discussed. 

H. Conversion Seminars 

Seminars open to business, unions, and community leaders to discuss 
dislocation problems and solutions would, we believe, prove useful. 


230 












ACDA/E-156 


~ r. 

«iir® *»■ 


t 


• • • 
<y a 
1 • 


IT 
> • 
r 


*ao;«4 
A AMA t 

i ' 


« 

• ■ 

r iv 


« e. 
• • 
• r. 


! I i 

I > I ! ! 

Cll‘x^A«cr.C9« 

A' ,!• AC ►•' Ar I r .: 

I • «-> I 

I 


! 


I 


•| 


A tfl 
> a 
O 
A 

S 


t 


r 0 * ir,* c tr a* if »£ c r-. 

**. • C Ai tf **> *4 •« (V 9 *i 

; i a i 

I • i • ' * 


1 


* cr. ci r 

• • • • 
t tf •- I 

I I 


AC^hK'hiAC hA AO AR Cl 

I A A^A U If A AiA - | » » f»! 
i t ii*~ r i i » i t ri 

I • ‘ i , ». 


r*i 

► 


A 

I 




A' 


a 

a 

91 

7 


c' 

a| 


i ^ 

H - 

=1 i 


i I 


is 

i. 

i *> 

s 

> JJ 
i **a 
•O 

e 
' S 

i* 


l/> 

A 


C •> *< A A ** 

cor 

c r ^ 

C C C 9 (V <i~ 

1 

K tf 

c> 

9 

IV 

u * 
a £' 

{jJ w 

X 

•* 


t 

1 

1 

l 

» 

( l 

S i 

| 

1 


I 

••I 

u 


• 

• 

• 

• 

• 

r 

• 

• « • 

• «- • 

9 * • • • • • 

a 1 c 

• 

« 

• 

u. 



CA - A 

COR 

C 4 A 

ccer aco 

A. 

tf 

9 

u c 

*-■ « 

C tv) 

►- 



1 

1 

I 

1 

1 t 

i 

»J. **i 

i 

tv 

T 1 


1/ 







•* • 

• 


• 

££ 

c 

c 

C C 4 C <" 

C Cl 9 

ci r <c 

fee r. c a o- 

Ci *t 

9 

a 

A 

u. ^ 

A"* 

•» 

« 

I e i i i i 

1 1 9 

1 

1 

1 1 5 

■ ••••• 1 

t 

1 

1 

ii R 

1 

1 : 

0 

a 

cv 

♦ 

U 



C A <« A A •« 

e e;- 

o © r> 

~ C C <£ <Ni C a- 

c| r 

C 

c 

ir 

2. I:. 

C •- 
•-C 

c 

I 

1 1 1 t 1 • 

9 1, 9 

! 

1 1 i 

1 f 1 1 1 1 • 

' R. 

1 


r 



> c 


aaaaaaaaaaaaaaaaaaaa* 

OiCe®ifHio«(«i*hcchr;cAjMriyl 
If (tMIAH^ir A A f, f r o J A' if R : 

•- i A A A 


« m 

c- r 

r r- 

«- r 


4 • 

in r. 

9. R> 


9 

r 


«r> 

> 


« M 

H ■H 

3 * 

3 • 5 
H 5 


~ tf (VCC 4> 
if «. 


► C A V 4* AJ ^4* A* O in « A» aM (\J tf tf 9 Al H 0 

,W 4 < A « »^R AARw«».s^ IfR 0 A 

»- tv a. a. . R. r-. 

, ! - *• 


o-tf«Va.C94~C\lf'-94- 

«n tf m 9 tf cm -4 .r r> 


NCN«-~rtiClf!R4 
M«aR><aaaa 4 Rtf)N 
44 Ai IV A! 


> 4 • 4 • 4 • «| 

Jm " - - _ . 


•-tfM«tfRr~cir~9r'*tf®r»44;<*©tf9R9i 

;T <o a i « Ahhr 

k A A A 


I 


R. 

m 

r* 

R» 


«4 m 


i »• 


4- 


4 

a 

9 


c 

A 


eoc oeeoooooooeeea-teaxoo 


9 

9 


m 

9 

m 


c 

R> 


IO 

R> 


oc« 40 H*«coaoooHC ooiunnoo 


RJ H 
«4 »4 

I 


3 V 


aj 



tf A 

ctr* jhAARMf err^oa^. 

a r- 

A- K! R> 

O' 


O' 

tf 

O' 

n 

9 

N 4 OAHrtifl H o< R H -1 

*4 9 

O ^ AJ 

-4 

»n 

R 

i 

• 




A 

A W 

R) 


i 

R> 

Al 






9 -# 

R> 

i 

\ 




x> 

CtfrOf'CMr^RiA-ifir-r'-a-aotf 

1 

9 R) R) 

tf 

® 

/> 

o 


41 

tf 

Ad X Ah HR h R rtH 

— 9 

RV tf Al 

o 

tf 

»n 

tf 

• 




<NJ 

A* Al 

>o 

r» 

1 

•o 

9 



i 


1 


•r, 


^4 




UJ 1 

3 J 

(V tf 

UJ 


O H III O 

44 UJ, tf 

4 - 

i 

X 4 - OC z , 
a x 3 : 

tf 3 5 tf tf. 

9 

4 - 


UJ 4 - z • 

UJ UJ ►- 3 Z 

tf 

Z 4 - 

J 4 *4 (/) 

J wool 

UJ 

UJ O o 
X —.3 

-J Z *-• ■ 

O X 0 Z •- 

« 3 X -J j 

•r X U.' UJ H 

! * 


a - 

l- y O . 4 - U. 3 
>- j 3 « um i a 

x z c x a -j u x i 

I- u 2 *■* -a«-U>H" 

3 a z Z’.o xajH 

3 C — O C 'aJ « 5 x 


j|s uo. z < 

ar uf >,M « B 
OZ Z X I 


U|UI 


4 * 

'> 




X 

I 


i: 


X; tf tf 
0,1 U Z 
4-'« tfi« 
©•«- 44 OC 

r< **►- 


l AZ 
tf UJ 9 
Zu — 

J 

JO I »i *4 
M<,ZC> 
»- X — W -• 
3 ►- 14. AU 


O 

u! 

Gl 

* 

3) 


$ 

► 

o 

5! 

X: 

ui 

jt 

0 

K 

O 


< 

& 


2 uj 

i I 


1 

u 


X 

o 

CD 

< 


> 

•4' 

O: 


UJ 


z 

u. 

X 

>- 

o 

-I 


231 





















ALASKA TABLE is (continued) 


ACDA/E-156 


I 


« V «' 
11 

V *tf! 


*~i ir i 


c i 

O' l_ | 

n?t\ 

u 1 tv, 

och ~l 

Li 2 
l.l 

U C 

*-© r- 
c u. i 

(L •">, 


ST 

U 

c 

2 

Li 

a 

u 

u. 

u. 


\r 

a 


I 

a 

v. 


«r 

I 

*1 


l. 


u. 
X u 
c I- 
*-e 

_J 

ul _ 

X * » 
5 *c 
o m o 
© 
f 

i a 

e a 

«- c 

x s 


u, 

l. 

2 

c c 


HUG. 1 
W ? , 

2 

s $ 

4 

O I 

L> O 

A O 

2 


\ 

oU #^*o 

• • 4 » 

r tv I— 

i 


4 4 K. K.O C O m. 

•I • • • 

c «v r 

m ■ m» 

I ; I 


-| • • • 

r> tv ; «v 


4 tv 
• • 
m i 


m'N 
• • 

7 


4 j Xf 
• • 

M A 

i 




r.i* 
» • 


tv It* 


tvn «-« c 4 . 

*VVvV 

■ ; * 


r-irc‘irc,irir<£«r<£«'4: 

» 4 «A^AC<«»»AA 

! * i' 

<v «c ir.: trl« <v h tv •« 

• •••■(•••■• 

I I —'if C^r- 

I - tV I 

s • i 


I 


r- * 
• « 

l I 

i 

» 

i 


f- cv c c c 

• • », • « 
tv *■ mV r* 

m 

« 


— « If. nC cj 

7i 


•• 

t 


a 

»i 


<£ 

» 

0 

I 


«£ 

I 


cc 1 

•I 


« 

I 


If 

<s 


11 

l tv 1 


tv & 

4 • 

if I M- 









* • 




* 

•• 

A 

c 

c 

c © c c 

C 

© © c c c 

t c © c 

C C m 

© C 

0 

c 

© 

tv 






1 I 9 



Ml 

1 

A' 


• 

' 





1 

1 


•! 

» 


1 




• 

• 

• • • • 

• 

• • • • • 

i 

A • * • 

0 at %> 

1 

• * 

• 

♦ 


• 


c 

c 

c c c c 

© 

c e'e c c 

c c e c 

©Cm 

C m; 


if 

c 

tv 



» 



1 1 

1 




tv 









1 


•1 

1 

1 


; 




1 







« 

1 

• 

c. 

c 

c 

c c c c 

c 

c c c c e 

c c c c 

c c c 

C r ! 


tf.■ 

tv 

tv 



i 

1 

1 

ill i 

* i § 


M 

m 

tv 








t 

» 


1 : 

* 

1 


t 


c 

c 

i 

c c © © 

c. 

1 

o ©'c c c 

i 

c © © © 

©Cm 

© © 


c 

mT 

© 

c 

1 

1 

i 1 1 1 

1 

(•III 

till 

III 

1 • 

1 



. 1 



m in pc © © 


•h G •-* O C 

J if Ml © 

c 4 : C 

4 : m 


tc 

H 


« 







•— •— 

K 3 


tv 


© 




; 







IT 




mi m 

©jtv © o 

«-* 

i 

mi e mi c e 

3- if) Ml Ml 

© 41 O' 

1 © IT 

tv 

c- 

0 









m # 

4 

<v 

MV 

© 




i 


l 

1 

1 


1 


m 



• 





0. 

0. 

o. 

0. 

0. 




• 

• 

• 

• 


O 

© 

coo© 

© 

0 

0 

0 

b 

0 

0 

0 

© ©! 

Ol 

0 

O 

0 

<£ 


i 

1 1 


1 1 

• 

1 »: 


i 




I 




£WCC 


! 



i 







n 

•• 

Ml © Ml C O 

J iTmi|m 

© 4. O 

<£ if> 

tv 


4-4 

© 

St 







h •*) lO pO 

m 

© 


© 








. 

1 


m 





m tv © © 


1 

Ml © Ml O C 

i 

tf if, V mi © 41 <if 

41 iT: 

tv 


• 

•-< 

a 

* 





! 

1 

M< M lO K)| 

m: 

mi! 

© 

»-4 

© 






! 

: 


1 

m 


4-4 

m 

© © 

0. 

0. 

0. 

0. 

0. 

© © o o o 

-0. 

0 . 

0. 

0. 

0. 

0. 

0. 

© Oj 

O 

0 

r 

© O 

1 


me 

•r- 

>r tv © © 

•H 

Ml C M © © 

3 if « « 

O 4) © 

4> <V 

© 

tv 

m-A 

• 

O 

Ai 







M| Ml >0 ■O 

m 

© 

•»4 

O 










O-S 

fO 




-A ^ 

A <M 3 © 

•H 

O -4 o O 

J / H M 

© X © 

© <v, 

0 

cv 

cv 

1 

© 

«-4 





1 


m m 

m 

0 


O 




' 





1 


K) 


4*4 


tv 

a 


U- 

:> -i 

o *■< w 
a i- a: 
a x 2 

If UJ 1 “ 
Z K _J ►- mi 

U O u J 2 

at — 3 « c * 

“ heiw : 

I- U O *- L. 

>• _i O * lii 4 ! 1 

X v O £ £L J U 1 
U Z K —< >-i tjJ 

i/l l/l C >— CE X 

D X Z Z j O x O { 

'JOhOOjj« X 
24 t*L»'L.*-U.-l 


© 

A-4 

X 

if 


X U> >- 
DJI 
1 t UJ 

I uz 

K M.I >M 

Z A.X 

Ml Li'O 

xz;< 

CL U Z 


l/! © 
U Li 
J 

U X 

M. Ct 

r i 
uA 
> »-« 

a 5 

o i 
►- a 
O 

z 4 


u» 

tu m 

a ui 

X l/l if) 
KDZ 

o o o 

4 z m. 
L.,LIK 
X a 4 , © 

2 < UUI 

< S H M 

X I 2 l~ 
in © «-> ut 
U 2 A -I O 

m < x'~ 4 

mi ot ©!►> at 

»,►> yOp- 


UJ 

£ 

ui l- 
Li > uv 

O LI 
• © O' 

2 X| 

1 i/l Z O' 
Ul Li 4 L| 

2 U » 

HM JO 

1 > Ml UJI 

2 tn> Xi 
*- Li *-• Xi 

li l/l VI <! 


H 

Z 

H? 

V 

o 

i 

Li 


2 

O 


4 

i> 

a. 

o 

A 


2 

*: 

S: 

j! 

A' 

X 


>l 

•M 

o: 


LI 

O 


X 

o 

cr 

4 


> 

Ml 

O 


232 


UwfcMPLOVMFNT KATE 10.7 10.4 JO.4 10.S 





















ACDA/E-156 



9*1 

(T 

« If 




l! 


a • 

If 


< • 

%9* 


c 

1 


If c 



k> 

9*. 


C> U. 

« 


?£ 

♦ r 


L 

CV 


a. k 



U 12 



U. U. 



iL c 

—J 


► e 

ft 


C u. 

i 


a 

999 





If 

1 

CV 

u 



V 

t 


2 

If- 


3 

99 


or 



U 



U. 

99 


b. 



t- 

1 


c 

!V 



w 


ft 



If. 



e- 

9-. 

c 

*> 

ft"' 


u. 

|l 



9-* 








2 

u 

0 

e 

b— 


►- 

c 



c.,r. 

• • 

cv a 

l 


<£ « 
9 9 

CV 9- 

I 


»-*. ® 

«a~ 

i 

® r 

9 9 

N CV 


^ .£Cvft«iaft 3 ftr-c 


cv r cv,«v 


,if »- 9 «r *- 

i yi i 


cr. 


o r. rvcv ®i 

* 9 9, • « 

9- JT r Oi 


SI 


r r 

9 9 

I P- 

7 


9 9 

C 9- 

I 


ft : ft 

9 • 

I' I 


3ifctC\0!9Ce-.-«* cvJif 

» 999 ^ 999999 je 

IT 3 CV IO ® CV K 3 «» •* 

I , 

' • 


if «-.cc9|ftsica 3 r.;« 

99999999999^9 

I i <v <\ *-'o i if ft cv cv - 

• • i i si ill 

i 


r 9 - «v k 

9 9 9 9 

CV 3 3 ft 


O If c 

9 9 9 9 * 

I I I I 

K 

» 


I 


I 


9- C 


CC C- C C K* C ft 9 CCi 
I II i 


ft. ft If C if* 

I, 


I 


... A • 

ft 9- ff C C C C C !<• C r . ft C C C 

• I III 


rfticch( 


! 


I 


9 9999999* 99999 9; 9 9999 >1 

c cv c c c cc cc if cr *■ c e c *- c c ft 

I I 1 ; I ♦ I I I I I S I I I I, I * I I I I 1 


ft 

i 


r 

I 


ft 

l 


S3 

<\ 

I 


C 9**CCCCCC9-CC9-CCCrftlfCC 

I I I I I e 1 1 1 i I I. I . 1 I I 1 1 1 1 


vt 

I 


ft 

I 

I 

C 

9 

7 


r 

I 


c 

CV 

I 


ft 

I 


J 

*• 


•1 
c 
r, 


CV 

I * 1 


r*i * 


—, 3 


if| <v 

9-! I 


ft 3 

n ' 


w; 



bl O-i 

n3 

«» 

S < s 

a »C 

9 

B 

•H 



If 

c 


0 

x a 

0 

sy 

u- 2 


*- c 


X c; 



w 

_9< 


u 

H 

a 


z •r, 

c a 


ft 






ft if *■ CV fti — 
•- 9 - — r» 


a. 

ft 

c 

CV 


h i ftc ft c ® ® ® »r »r — 3 

ft 9- If •* |f. f 9« ft If a ft ft 


©eoGoeoooeooocociCGcoo —< 


CVI 


c 

I; 


c. 

r 

ft 


® O ft ® 

ft 0 cv ir 

ft c ft 

CV 


< O — 
















2 T 4 — 


cv 

fO IT 



3 fft 9 -. 

c 

CV ft- 

If 

ft- E. ® 

x r. r 9 - <£ 

O 

If. 

O') 


0 c. 

If) 

CV 





IT 


1*1 

•H 

CV if) : CV -« 

0 

ft- 

m' 

fO 

K ^ r 











•«- • 


c 


r»- 

9 - X vl. c 













cv 



a 5 . u 











\ 





*r m ?- 



* 













<£ 
































a.- 


fv 

9^1 CV 

c 

9 - « 

3 O' -• 

c. 

CV ft. 

If. 

ft. cc to 

® m cv — «, 

c 

3 

tft 

cv 

0 5 

3 

cv 

iTf 




in 


K> 

** > 

cv in 3 <vi 9 ^ 

0 

ft- 

n 

in 












ft— ft* 

ft 

c 


ft. 

i. c 













cv 



2 ! 














1 






























• 

• 

• 

• 

U .9 


0 

0 0 

0 

0 0 

0 

0 

0 

O 

0 0 

O 

0 

0 

0 

«h (vo a 

X 

3 

3 

cv 


u. 

2 

c c 


SO zL 

h x a 

u & 

O 3 C 

i C * U 

« 5 > 

«* 

a 

3 f S 

o o 

—i Uj 
2 


c-. i« . ?*■ o *-• a: 

<v -« f) ~i 


3 C *- O ft It If- MKj« lO fl S ^ ft 
S> rO —H ; ftl A J .M -9 


cr. 

3 

ft- 


If 

ft- 

O 

CV 


cr 

>0 


3 

-n 

ft 


cv -o cv 0 


£ 

3 cr h j- 

CV 0 

3 

ft Xf-C 

n wo 

CV 9^ ft. 

CV 

0 

<v! 

cv 

€\j *+ l/> 



1 3 


m 



CV f> 

3 CV -C 

0 

ft 

3 

m 









H 

H H 

ft 

0 


ft 




’ 






1 


cv 

} 


• 1 


u. 

. 






1 

i 



j 

1 



a 

3 


a 

n 



3 


►- 


1 



0 


1 U 0 

ft-* 

3 

in 




2 


t- 



X 

V- 

* 2 

D 

X 

3 


< 


3 


2 f 1 

3 


c. 

X 

3 •-* 

vn C 

“i 

ui in 



X 


UJ 

u 

If 


UJ 

ft X 

•3 uJ ft 

r z 


if. 

ft ! 

ft- 


X 

X 

2 ft- 



-* I/) 

3 

0 

0 0 


3 

> in 

0 


ft 

0 

UJ 0 u 



2 - 1 

O X 

« 

X ft- 



C 3 



OI 

u~ 

QC- ►* Z 

ft -4 

2 ) 

X 3 1 

— X 

b. 

ui ft 


• 

c£ U 

ft. 


3: 


_ ♦— ^ 

X 

U- 

: ia ► 

X ! 


X < 

tr 

X 

* 

X 

X 

CL 

X 

ft- O c 


ft 

u. ^ . j a 

uj a 

2 

< 0 3 

1 

in z 0 

3 

0 

X, 

0 

-j 3 a 

UJ 


i a « ui 

> 

< 


-* 

in 

3 < 3 



3 

■I) 

2 0 x a 

_J 

•3 

x 1 0 2 

1 

X 

? 2 

ft 

2 

<-> - . 

3 

>— 

2 

< 

0 2 ft- 

•«4 

*»* 

uJ ►“ *“* *“* 

x «n 


in x 


UJ 

ft- J c 


< 


3 

— — 1/1 0 


X 

Xi Z T X 

0 1 

u 

2 X 

3 Q 5 

>9-93: 

►- 

Jl 



j 2 2 0 

X 


X — UJ. 0 

ft a 

I/I 

< X 


< 2 

a > x 1 

0 

X 

« 

• 

O ft. 3 G 

u) 

4 

-1 rt ¥ J 

0 « 

r—» 

X 0 


X — 

3-. x- 

►- 

a 

>1 

> 

< * 3 ‘X 

►“ 

u* 

J 1 i> X 

x < 

z 

H* ^ 

X ft 3 

f> U <*] 


0 

a 


•-* 

u 


233 


UKCMPLOYMf NT KATE. _ b .8 5 .? S .3 3.7 S .14 


















APKAN5A5 TABLE 15 (continued) 


ACDA/E-156 


< * «i 

„ .ji 

* c * 

u t 

u O. 

lu ? l 

u u 
u t - 
► tt e 
C U I 
a ~| 


J * 


if 


U 

c 

C 

1 

r 

If 

u 

w l 

a 


u 


u. 


U- 

a 


1 

c 

0 


w 

►* 


u 


a 

#■*’ 

*■» 

o 

u 

t 


A 


•»' C 


Mf'lO If ^ 

3 0 - 

1 

ci«~ h a 

<4, x> cjir 

C (0 If- 

Oj « 

O). 

0 1 

«©l 

•»* 

1 0,- r.« 

r 0. 

lo- - 

« 



0. r r. 

0 



If' 

rr- 



t 1 

1 




0.1 




t 







• 


■ 

1. 

1 

1 

o C 3 a 0 

c 0 

1 

One 

c r 

4 

it <\ *■ 

If « 9 

r c 

ir 

0. 

f' 

9 1 

1 0. 0. 3 if 

•r r 

, a oj 




O. 3 9 

f* 



tr 




, 1 





I* - 





i 


1 

1 




1 



*1 


f 

' K. C IT »r 

0- 0. 

1 

c \ >L if 

0 

c 

Mf A 

O c 0 

Oj C 

c 

If 

1 

* 

O' 

3 1 - « 

0 0 

0 - 1 

if 

K 

OOO 

- «- 1 

1 M Cl 




1 » 1 

1 1 

1 ♦" 


1 

1 1 • 

1 1 

r 

• 


0. 


» 


1 

1 


1 


1 



"l 

J 

- c «- c c 

•- C 

c 0. c 

c 

c 

c c c 

tr — & 

c r 

* 

sr 

r: 

s 

1 


j 1 

» 

l 




• 

• 


•l 

1 


1 

- c — •- c — 

- c 

c 0 c 

c 

c 

c c c 

r — e r 

c 

IT 


c 

1 


1 

1 




1 


O 

1, 

| 


: c c c e. c 

*-« c 

C K C 



i 

— c c 

0 c -• 

C f 

3 


1 

r 

0. 

1 • 1 < l 1 

• 1 

1 1 1 

1 

• 

1 1 1 

l i 1 

1 1 

*- 


o< 



** c — ec..-.-«c.c«-ce.-*~cci»*-if c. c 

l i I I I l l. I t l I l I I I. I i I I I 


a 

7 


oi r ' 


i/ k<\ — o <\ o o. Oj to •- *- 


oi 

o 

c 


3 

»r 

c 

<v 


1 

OJ 

o. 


c 

c 

r* 


o. cc m «-»to «r occtoA-o-tfira-r^r^ccfOA- 9 •*, 
if »r o. — to o. so. AAr 


© 

•■H 

f' 


r- 

<\J 

© 

o. 


o 

c 


01 


u. 
u 
7 - 
c c 


oocoooooooocoooooocoe «vi 


-*t e 
»' 


-1 .1 : 

0 ~ ASif«totccirV. AijassMAiCrtO'’: o 3 a r*- 

H CA lf> if) tO Oi «h to OI 30 ) OJ Oi fO «-t © Ifl ■>-• 

w i •-•-w-.r'C 

- - - : o. 


x. c 
• u. 

f' 

<0 


t 


If 1 












c 


— CC 3 

— to a 0 « 

ir tr oj 

3 3 

9 NO o 0 >c 

to O' 

a 

3 

O 

A- 

O 2 . 

3 

tf) 10 

Oi »o 

0 , 

3 

OI O) O) to 


O' 

uO 

Oi 


aJ C 






••0 <*■« 

•M 

£ 

O 



2 U 







I 


Oj 




7 — 
C O 


u. 

U.. to 


^*00000 -< 3 c. 000000 c.^* 0 t \)00 r- *4 .£ 

, • 


« -J 
















0 



0. 

a 

if- 

3^ 

K 4 . 

0 tr 

4 f. 3 O. 3 

a 

OK 

X 3 X 

3 a. 

fO 

«? 

C£ 

3 

H rc a. 

'Ni 



>0 

A) 

-4 

■0 

OI 

3 OJ 


OJ OJ -0 

H 

0 

in 


H 

« X 













0 - 

c 



X 30 * 














Oj 



5 • u 

















« 0 

















ji 

















# 
















« 

A 


•-4 

F' 

3 


>0 X 

J 1 S A J N J 

to 3 

O' 

X to 7 . 

rO X 

if) 

X) 

f» 

SO 

S 2 

•-* 

r. 


rC 

Oj 

•M 

O) 

O) 

3 OJ 


O) OJ tO 

•“A 

O 

Ifl 

OJ 

rM 

O O 











H H 


•O 

O 

1 

r*- 

-J U 










1 




OJ 



7 










i 





♦ 








Uu 






1 











T _J 


a. 

tf. 


UJ 


K 










O « 

u 0 


uj tn 


K 


7 


t- 








I K 

T 7 

O X UJ 


< 


UJ 


7 








Q. x 

^ •-< 

uo 0 

3 to 

in 

1 - 


X 


Uj 

0 






LO 

UJ 

t- T 

UJ UJ F- - 

7 

in 

►- 

V 


X 

z 





2 

►- 

_) i- 

«-• to 

1 -J 

0 0 

O 

UJ 

> in 

c 


>■ 

0 



UJ 


0 

u 

_) 

z >- 

u a 

3 X 

»-4 


0 u. 

_l 


O 

u. 



c 



W 


or -s 


U UJ 


• 

C Oi 

X 


J 






r— 


>. ^ 

r x 

If ► I 1 

X x 

« 7 

X 

X. 

X 

z 


z 





0 

0 


U. O -J X UJ Q. 

Z «r 

O UJ 

1 m 

z 0 

UJ 

0 

X 

0 


>- 

_) 



2 U < 

» 0. 

< Uf > ft 

< B 

M H 

in u 

*t U. 


»—« 

U) 

to 


QC 



t: 

a 

_) u 

x 1 

U 2 X 

X 1 

Z K 

z 0 



!• 

2 

« 


►— 

u 


►- 


*-3 M 

uJ 

»<i"< a 1/1 


w -* 

U) *9 *1 

_i 0 


«4 

3 

J 


J- 

►-i 



0 ►- X 

ex z 

XX 0 1 

u z 

X _J 0 1 > 

M Uj 

H- 

_i 






z 


0 

x a) 


wo»- a 

tft < 

X -• < z OC, 

> X 

0 


• 

• 



0 

*-* 


0 

aJ < 

a 

X < O <-i 

•-» X 

O't- 

X «- UJ, 

M s 

>— 

a 

> 

> 



< 

X 

0 

u. 

»- lL 

J (V 

_> X X < 

X t- 

0 0 

►* u. Jl| 

0 < 


0 

pH 

-H 


••e 













a 

0 

0 


V 


234 


UNEMPLOYMFNT RATE 3.*4 2.5 2.A 2.7 




















ACDA/E-156 




1 

i 


c- 

1 ! 

AA'CiCO ¥. 

1 

a. c'o 

3 O © ft 

1 

©‘ft. 

O ft 

1 

If. 

ft © 

c. 

© 

. 





IT 

• 

• « . 

• • • 

• • « 

• • 

• 

• 

• % • 

• • 

• 

• • 



* 


IT 

a.' 


r j 

1 CV ft 

r » ft 

ft. |K 

ft; r 

ft 




ft 

C 


•i 


, 

if 

9 . 

• ir 



1 


' 1 

3 

1 

i 

i 


| 

1 


ft 

1 

1 




< 

— .* 

Wl 
















c 




1 















c 



if 

a a ir 

3 ft C 

tt C - 

0 * 

0 

If 

ft s 

3 v£ 


ft c 

ft 

c 

a 

ft 




a 

• 

• « • 

• • » 

• • • 

• • 

• 

• 

*’ • 

• • 

• 




d 

• 

c 

a. «c 


cv 

1 ft ft 

3 <0 ft 

1 •- 

ft If ft 


9 ~\ w * 

ft 3 

& 

ft 





ir x 

U 

1 

A 





•7 

! 

If 

1 

1 





tr, 

i 

• 

.1 



Q. 

»- 

w 














U 

z 

















• 

U 

u 

U, 

© 

*». 

v«" 

»rc «| — 
• • • • 

c ^ r 

• • • 

3 ftltt 
• • • 

a <£ 

• • 

4» 

• 

If 

• 

«CiC 

• • 

O < 
• • 

c 

• 

-c 
• • 

* 

• 

sC 

a 

If 

► 

O 

h 


1 

3 l. I 

- i e 

f' a 

l a 

ft 

ft 

ft ft 

1 1 


i ft 



v£ 

1 

c 

u 

i 



i 

l l 

i 

if 

t 

1 

1 1 

1 

ft 

i 

1 

7 



a 

•«*. 





s 

i 














1 






1 




■ 


w 

• 

IT 



<V 

3 

C 0 IT 

c tt ft 

3 - ft 

— ir 

a 

ft 

•— 

c o 

C 

ft w r 

ft. 

c 


ft 

ti 


c * 



1 



<f 

•— 



ft — 

tt 

0 

3 

ft 



V 

<r 


i 





• 

» 

1 

1 





) 

s 

1 



a 


W 
















c 


1 

















u 















• 

• 

* 

• 

u 




ir 

C ft 3 

C 3 K* 

3 —1 « 

ft ft 

3 



ft 3 

if 

3 C 

ft 


47 

tt 

u. 


cc 

•— 


f - 


|tf 

<r 

ft 


1 

ft ft 

ft 

•»* 

C 

•— 



►» 


f 





» 

« 

1 






•- 

ft 



c 


S' 











1 

1 

• 

1 






















ft 





\ 














1/ 



















n 


«•»! 

c. 

c 

ft r c 

C C ft 

ft - If 

c a 

If 

iC ft •- 

3 ft 

ft 

ft 0 

< 

ft 

3* 

ft 

►- 


ft: 

o» 

i 

t 1 l 

1 1 1 

l 1 ft 

I a 

o 

1 

1 1 

- 1 


1 

a 

49 

ft 

3 

a. 


» 





1 

1 

1 



1 

1 

3» 

i>^ 

ft 

ft. 

1 















1 

» 

• 





v— 









j 

I 










u 


3 -> 

ft c. 

ft ft. 

If — 

ft 


3 

X 

X ft. ft 

ft c 

x. 

3 O 

«— 

ft 

r-i 

X 



z a 

o 

S 1 - 

i i 

i i 

1 1 


1 

1 


I 1 1 

ft ft 

X 

1 

c 

0 

X 

r 



c — 


1 




1 



1 


1 1 

1 


ft 

1 


• 



— c 










t 




1 






Ui — 







































T9 

h 01 


ft) 3 C 

ir o 

0 ft 

X X 


•-» 

X 

ft 

cc rj — 

ft c 

X 

ft) © 

4T 

er 

3 

ft 

X 

« 

« a 

ff 

fi ft ft 

if 

if a 

ft X 

ft 

X 


ft 

3 c X 

O 0 

3 

ft 

r 

c 

ft 

jr 

• 

3 



ST 

V- 



X 


ft 

X 

ft —. 

X 3 

X 

3 3 

X 

X 

3 

X 

X 

C 

R • C 










• 

ft“ 

ft- 

ft- 

tt 

ft- 


a- 


4> 

m ft o 















ft 




c 

c 



















o 

ft 



















o 





















X c. 


<0ur -h 

It c 

ft c 


3 

ft! 

X 

ft 

3 X! ft 

3 «C 

ft"* 

ft a 

X 

ft) 

C 


X 


c s 

ft 

a ft. ft. 

If - 

X c 

ft. X 

e 

X 

ft- 

49 

X C X 

X — 

ft** 

t r . ft- 

ft 

c 

C 

ft 

«• 


•- c 


— ^ 




X 


<\ 

V 

ft — 

X X 

r 

3 3 


X 

K 

X 

r. 


X © 











•ft 

•- 


GC 

ft^ 


tt 


w 

z- 















ft 

1 



s 

- 


1 

















H 

u. 


G S 

© c 

© © 

o 


c 

G 


© © © 

ft! ft 

x o ©, 

<c 

X 

X 

ftH 



u 

X 













ft- 


1 




•- 



















< 

c, c 



















*— 











* 



! 






z 

» 



















x 

O __ 



















c 



X 3 S' 

a. e 

ft c 

C X 

3 

ft 

C 

O' 

© ft. — 

ft ft 

X 

X ft 

ft 

c 

tt 

3 

X 

u. 

5® a 

If 

» ft! ftf If! « 

<0 ® 

ft X> ft J1 Xi O if © X 

x; — 

O ft) ft 

X 

ft 

ft 

X 

• 


o z 


•- 4* 




X 


•— 

X 

ft — 

X X. 


3 ft. 

3 

K* 


X 

X 

•J 

Q VL O 













ft— 

3 



a 


< 

£ * L 













1 


fj 

I 



u 

« r- 

xT 










i 










* 


a 

X. 3 tt 

S 0 

ft O' 

O' X ft 

ft © 

tt 

O' ft — 

3X0 

%C <V- 

* 


3 

ft 


C T 

3 S3 ft ft 

X 

X « 

ft X ft 

X X 

© 

3 O X 

X — o 

IO Oi. 

K> 

•—i 

CD 

3 

«• 

U/ C 

— 3 



- X 


X 

ft — 

X X ft 

^ *o 


•r; 

3 

X 

tr 

S U 










X 



tt 



ft 


•x 

U. K1 
Z ~ 

o c. 


NHH4HNO X J". 

—• <vi ft 3 


«n 3 
in ft 

l. 


pa -J 















V—j 


f' 4J 

ft 0 O 

ft 0 

© X ft ft. 

r. 

O ft « 

47 CsJ 

ft ft c 

ft 

c 

a 

IT 

If 

h x a. 

Csi 

tt ft ft X -i 

X X 

ft X — X ft 

© 

X O X 

X ft 

ft "3 O' 

ft 

O' 

ft. 

X 

• 

^ S 


oH 

4* *-» 


•-* iT ^ 

X 

ft •— 

X- X ft 3ft 

3 

ft 

3! 

<£ 

X 

X 3 O 









n 

<r 

•—< 

) 

C 


5 *a> 











ft 




a O 















X 















<#• 












•l 

• 


0. 


X ft ft DO 

ft tt 

tt X tt ft o 

tt 

ft ft — 

© X 

X x » 

0' 

X 

«—4 

O' 

ft 

« 2 


tt ft 

ft X 

X tt 

ft X O X ft 

X 

3 © X 

kT 

o- in O'. 

3 

3 

"2 

ft 

• 

o o 



3 — 


f) 

X 

ft ft) 

X X 

0 3ft; 

<n 

ft 

<n 

0 

0 

-J © 








•H 


© 


1 

« 


z 





1 




i 


cv 

| 







tu 

1 







i 






a 

J 

a 

X 

i 

UJ 

i 

ft 








o 

ft-e UJ 

O • M 

IX 

X 

ft 


z 


i- 


UJ 




a 

»- a 

Z Z) 

a. 

UJ 

< 


UJ 


Z| 

u 

ft 




a 

X D 

*- 1 X o 

—tt 

X XI 

h- 


X 


U! 

o 

tt 




X 

UJ 

T W U 

h- 

3 Z 

X 


>- 


t 

3C 

X 




z _J 

r- •-* 

X _J 

u 

O Oi 

oJ 

> x. 

o 


>- 

O 





o <-> _J 

z 

— u a 

4 

X - 


o u 

_l 


O: 

u 

ft 



X 

TT ^ 

o a 

-1 - X 

u. 

ui ft! 

• 

10 OI 

U, 


-J 


z 

, 



I- C I 


X X > X 1 

3 

i tt' x 

a: 

a 

1 

z 

X 

X 

UJ 




U c 

*- u. 

Z) J X UJ Q. 

z 

<U J 

i 

X z o 

u 

o 

X 

o 

X 


>- 

_l 

■3 * LJ 

tt 1 

a < u > — 

< 

If *-* +* 

X UJ tt u. 



UJ 


>- 


a 

r, x x a. _j 

3 X 

1 u z X 

z 

1 Z ft 

z 

U ft 

_J 

H* 

z 

< 

o 


►— 

o z 

►- *-* 

*-* UJ 

r* - - X ift 


X Z — 

Ui *■* 

ft _J c 

tt 

< 

D. 

_J 

-i 


X 

*— •— X C. <" 

a cl 

Z I X O 1 

u 

Z Z -1 

Q 1 

> ft UJI 

ft 

-J 



a. 


3 

XZZOX 

(3 Z 

— luu *- a 

X 

tt X ft 

< Z 

X > t| 

o 



• 

X 


a 

o ^ 

O O uJ 

4 Z 

xS<o« 

»-* 

a: ol»- 

JC — 

uJ •- a' 

►- 

a 

>| 

> 

W 


z 

•t z 

o u. — 

LL -J 

3. J I X tt 

X 

ft UfjX 

h- U. 

x o <: 


o 


tt-4 



•-* 




, 


1 




Cl 

o 

o 

D 


235 















Cr*L r 'RAr »0 TABLE 15 (continued) 


ACDA/E-156 


J 

< tf « 

v •* • 

< _• —. 

c 

w,<- 

u! 

C- u * 
?£*l 

u. n.; 

a i- 

u r 
u u , 

L. U -» 

►- a ^ 
c u i 
a ~ 


tr 

u 

c 

2 

UJ 

a 

u 

u 

u 


I / 

or 


i 

?! 


<r 

I 

0 


u 
2 U 
O *- 

*- c 


IS 

s 

§ 


a: 

a 

U > 

• c 

2 

o 
* 

x a 
c s 
— c 
x o 
2 


u. 
u 
z •- 
cc. 



^ o ^ 

c A 

; i 

r< tv. <l t ^ Er-Ah 

! 

oto 



«■* ! 

Xi 



If 








»l 1 

* 

• 


, 

cv *• n 

f J A r A A E n C A 



«v. *r o 


X 




i 

» 

i » n i 


i 




» 






l 


S 

1 

, 



i 

1 



x a 

i 

cvr^ror^ci'a 

X 

<v!ir 

^ 4 IT r c 

C 

Ai 

+- 

0 1 



• • • 

• • 

• • •••••• 

• 

• • 


•i 

• 

* 

• 



ASA 

)* 

e\. ir 

o jv tr <r o. cc «\i 

i a i 




1 

1 

0- 

1 

1 




1 1 


1 

• 




. 

| 


*«■ a ttitv if. 

<v c r. c, e a « r 

<£ 

i 

X 0 

C if C AC 

r 

X 

¥ 

X 


r 

* • «K • » 

• ••••••• 

• 

• • 

* • • » * 

^ 1 •“ 1 

• 

• 

• 

9 



1 a l I l 

1 - C. C A 1 c X 

r 

<v — 

¥ 

1 

C 




l 


• 1 ll- r 1 

i 

l I 

1 1 ^ 

1 








I • • 



1 

. 




1 



• • • 

• • 

• • ••!•••• 

• 

« • 

• • • t » 

. 

• 

• 

• 


(V 


C- c 

CCCCfTC^* — 

c 

C C 

r AiC cc c 

¥ 

A 

K 



• 


'1 II 

i 



• 


1 

ll 

1 



• • • 

• • 

• ••«!•••• 

• 

M • 

« • 0 • « 

• 

• 

« 

j 



•-« •— 

c c 

CCCCrCfcCV 

c 

c'c 

a r a c — 

C 

9 

X 

« 



1 


1 » ,« I 


7 

1 

t 

9 

1 


c 

C. c<w c 

c c 

CCCC a C. <\ a 

v~ 

c c 

<\» c <\ c *» 

0 

¥ 

A 

9 


♦» 

) 1 1 

i I 

1 1 1 II 1 1 1 

i 

I 1 

l « 4 9 — 

A 

W 

A 








» 

1 

1 













H 

• 



t¥- 0»*9 «»M 

e e 

CC A C — CJ & CV. 


c c 

3 <\ f- —i C 


<£ 

a 

¥ 


c 

1 t 1 

i t 

• 1.1 l.l 1 1 1 

1 

1 1 

till 

A 

1 

i 


1 












• 



X CL A x — 

x tr, ¥ ¥> «. r a o 

tv 

*-* 0 

«- X C C 0 


c 

t' 

X) 

A 

« 

f\ - L" 

«■* 

IT O' 

K' 


x x x x ^ 

or 

X 

9 

0 

• 







w <r- •— 

a 

* 


0. 

X 









A 





a cc tv 


>c a ^ireinr^ — 

CVi 


If h A C O 

A) 

® 

0 

A 

<\J 

a 

0i — X 


— K. ^ jr 

a— 

<t X X X l*- 

c 

X 

A 

0 

• 








0 

«A, 


ec 

¥ 









AI 





© o e 

c c 

o c o c coco 

o 

o o 

0. 

0. 

1. 

0. 

0. 

A 

•■4 

•M 




u *- 

. x a 

H 3 

S • cj 
5 a 
to ^ 

tf 


03 

£ 

8 .u 

0Q ° 

r. 

x 

X 2 

o o 

_i o 


If) 


a a cm a -« ■£ a 3 f. it i c fv " j 3>Ciiro 

<\j —i it a a >n x «- >o if >o vt 


<t 

cc 


a 

0 


<v 


J 

9 


A A <N A -» lO ¥> 3K)}fOiN CM >« lO 0 «f> O' X 

•i fv a X a A IT if) IT. <-> >C ifl vC ifi W 

•—4 H H 


K) 

A 

(0 


X) 

9 

■o 

CS4 


o 

o 


ur 


o 

ov 


a 

9 


Cc 


AAA 

A 


>£ IO 

9 ¥1 

X 

rr 

X 

a 

A 

— O' 

»r c 

X 0 C 

a 

X 

X 

c 

c: 

O S 

9 

A •-< X. 

•H 





¥) 



x <o 


XXX 

X ¥> 

A 

0 

9 

o 

• 

U. C 














•-I 



X 

HO 


0 

X 

2 O 


















A 




Z 












































u. 


0. 
0. 
1 . 

c 

o 

o 

o 

o o 

O 

o 

o 

o 

O O O 

A —• 

r) 

c: o 

X 

•«* 

A 



u. 



















1 



z - 





















o c 






















•— 






















_l 












































*=» 


f A K. 

r 

•— 

X 

z 

iJ K. 

X 

rr 

X 

I 

A 

— C 

X A 

a 

0 I 


X 


A 

CL 

X- X. 

AI 

"J -« 4) 






•o 



X 

to 

•H 

X X 

X 

X A 

X 

9 

a- 

o 

• 

2 

















X 

fO 


0 

9 

a C 


1 
















A 











-1 





■J) 




Ui 




A 


, 







o 

>—i 

Ui 

X 


r— 

JLi 

X 



A 




Z 









a 

A 

a 

z 



X 

UJ 



< 

> 



UI 


z 

UI 






a 

X 

Z' 

►» 

X 

o 

2 

X 

!£ 


A 




z 


u 

u 





X 


X 

A 

T 

UJ 

u. 

A 

3 

z 


X 




A 


X 

X 




z 

A 

-i 

A 


X 

mi 


u 

o 

o 


UI 


> 

X 

o 


Al 

o 


UJ 


o 

y 

_i 


z 

1-4 

u 

X 

< 

X 

*«» 




o 

UJ, 

-I 


o. 

u 


X 




i— 

c 

a 

-I 

M 

X 

u 

u 



• 


o 

u 

a 


J 



~ 


r- 


5 


2 

r x a 

x 

1 


a 

<i ^ 


a 



z 

X 

<•» 

a 

X 


A 


y 

o 


A 

a 

2 -j a 

UI 

a 

z 

< 

U Ui 


i 

X z 

o 

UI 

o 

X 

o 

V 

_J 


w 

or 

UJ 

< 

i 

a < u 

> 

*-« 

«r 

* 

M 1-4 


X UJ 

« 

u 


4-1 

ui 

B 

X 


O X 

a 

-1 

u 

X 

1 u z 


z 

X 

i 

z *- 


z 

o 

«4 


_J 

A 

f 

< 

w- 

u 


h- 


•-» 


UI 

A — — 

a 

X 


X 


uJ 



-J 

o 

« 

< 

5 


ai 

M 

•-< i/) c 

r- 

X 

X 

Z X I 

o 

1 

u 

z 

I JC 

1 

> 

4-4 

Ui 

A 

mi 



x a 

z 

2 

A 

X 

CL 

5 

H|*JU 

A 

X 

X 

< 

X - 

< 

Z 

a 

> 

X 

o 

3 

• 

• 

u 

O 

— 

O 

C 

Ui 

< 


a z < 

o 

•*+ 

— 

a 

O A 

T 


jj 

— 

a 

A 

a 

> 

> 


< 

X 

u 

u 


'wL 

j 

a j z 

z 

< 

X 

A 

J 3 


tk. 

X 

u 

< 


o 


A 

►M 



1 










I 







a 

u 

u 


236 


UNEMPLOYMENT RATE b.6 















CONNECTTfMT TABLE 15 (continued) 


ACDA/E-156 



IT 

• 

*. If « 

1 

U ‘If. 

c 


tv 

V'C 


w 

li - 

»• 


0 w « 
Z£ 1 

U tv 

a . 

UJ 2 


tv 

U. Ik 


a 

U c — 

X 

• 

*- 0 H 
Cl l 
a 


1 

t/ - 

IV 

c 

U t 

c. 1 

z «• 

u — 




O 

u 

u 

u 


C o A 

tv, 


I 1 

«• A< ^ «■* 4 A «£ C V. C O. « AC 1 

• • • • • • •• •• • • • • #,•«. 

< a a icAf r *-1 *■ * r r 7. 

•t t • v. 


* 

« 

w 

I 


a 
—• 


i 


X A C 
<\ 2 2 


croc<tifir —'w w a 


tv x r a c s — tv 3 

- 2 i 

i i 


a 

a 


x <. a a /Ac ck r ao*-kc^ac 


> i 


i - l 
l 


A f A ff 

I I I, - 
I 


l a c c a'a ^ 


IT I 
I 


I I I I I I 


I A- 

X . 


cc^cc^c-occritcccsro c 4 

- A | | 

' I ( 


— —. ecAc-^cr- 

a — 

I 

A 


A. 

•I 


2 

t 


x e - r* c c e 2 a — c m 

- x » - » 

• i 


<v 

I 


e 

A 

( 


2 

T 


r. 
»• 


a 


a 

a 

l 


• 

X 

1 r 
1 


c 


a 

T 


IT 

T 


1 


x. 

tV 

I 


a 


— c 

a- — 


ec.-ecec-- 0 .acx 2 —cct\«-xc 2 a o a- c 
# a a 2 tv 

• » I I i I I ! | 


U 
Z U 
C — 

— c 


I 


ccAcc^Cr-crc^if.^ cc 2 3 o —> c r- 

• • ■ I J I I I I H. I I . I I I. Ii I I I - I ' K 

I I 


*4 


H 

§! 


,cc 

a 

X ? 

• c 
¥■ 

I a 

c 3 
— c 

T U 

2 


Ul 

u. 

c c 





u. 

2 - 
c c 




35 a. 

Q a c 

S •<-> 

o 

f) 

2 

3. 
* 7 

O O 
_i <J 

2 



IT 

2 

tv 0 

C AJH 

A- 

2 

c 2 

tr cc 

CC 3 tv 

tr tv 

« tt N 

2 

2 

tv 

• 

U*) 

a 



< tv 

— tv 

tv 


C 

« 

tv — 

C 

oc 

3 2 «- 


V- 


3 









•» 


•». 


tv 




r 















K" 


*** 


m in 

a c 


O 

3- 

fliTlfllA 

tt 2 . tv 

2 

2 

1 

»(T H 

^4 

2 


2 




X CM 

— tv 

tv 



a: 2 

tv — 

C 

ff 

2 2 •»> 

2 



3 











•- 


CV ^4 

K. 

•— 


2 










1 




—* 

»r 

1 



0 

0 

O C 

0 . 

0. 

0. 

O 

O 

tr 0 

O ^ 

t J • 

coo 

•-4 

O 

-4 0 0 

3 

to 

3 

^4 

«c 









1 



i 


1 

‘I 

1 














• 

• 


• 


tr 

2 

a 0 

K# K 


3 

a 2 

c tv 

2 3 tV 


2 

CCKl, 

3 

3 






JO CM <M 

AHff 

X A* 

tv . •* 

O 

2 2 2 <-*■ 

7 

7 

3 

tv 









•— 


^4 


tV -4 

«v 

C 


r 













i 


K- 




iT tr 

a c* 

CtIH 

a 

3 

O' 2 . 

C CJ 

QC 3 tV 


2 

a a « 

0 

7 

2 

2 

X 



\Q Csj ** C\i 

CNj ^ 

o- 

JJ A' 

«V O' 

2 

3 2-4 

7 

7 

zr 

tv 











»4. 


tV -4 1 

cu 

c 

• 

2 




i 










** 

to 

1 

•-4 


0 

O 

—• 0 

O O C 

0 

O 

tv 0 


000 

tv 


3 0 0 


to 


O 










1 




H 

1 

1 

1 


2 

2 


e- Kj h* 

CC 


r~ 2 

IT C 

2 3 tV 

a 

A- 

1 

tV 7 tV 

2 

tv 

2 

tv 

*\J 



X M 

-4 <v 

N 

•H 


/) r- 

(\) H 

7 

B 

2 2 -• 

B 

2 

3 

tv 








•-4 


*■4 


tV *4 

tv 

O 


2 













1 

•-4 

X. 

1 

^■4 


2 - 

2 

2 Cl 

O K1 N 

00 

3 

/) 2 

M A- 

A~ 3 00 

2 21 

B 7 tVl 

7 

2 

0 

tv 




x> tv 

"« tv 

tv 


7 

2. 2 

tv -4 —< 

O' 

2 

3 2-4 

2 

2 

*>, 

tv 












tv -< 

<V 

O 

1 

K> 















•O 


•4 


tv 


UJ 

a 


>- _) 
2 2 
>- u 
2 — 
D 2 
c 2 
2 < 


<-> 
D 
O 2 
2 t- 
—< t/1 
2 2 
— O 

r u 


O 

a 

3. 

I/! 

A- _J 

* = 
C 3 

o 

T Ul 
c. _i 


o x 

O UJ 


u_ 

_l 

►4 111 (3 ' 

»- rr 2 

x 2 <-• 

Jt- I ; 

a- -4 2 
Zi I 
2 2 _l 


►- U. D 

< I 2 
U 2 I 
«UJt- 
2 2 2 
CD X *-* 

< Z X 
a. J1 


2 2 

M Ui 

UUH 
J u 

u a < 
*-* 2 u., 
ifi >- 1 ID 


2 

UJ 

i/i 2 

P 

UJ *—i 

2 <2 

o' UJ 


jauAZ < o 

x'uj > *4 < * a* 

02 Ix 1 z 


-4 ac 21 

X I o 10 
U/Uhtt l/l 

I « o -• <-» 

O X X < X 


UJ 
H 
< 

A- 

I/! t- 

UJ > t/> 

■ • 8 cS 

2 2 

1 iflZOl 
AUMIt, 

2 O <-< 
«« JO 


I 2 H- 

V 40 '—* ' - W te— 

3T *f_J C • > •-» Li 
4 Xim < 2 2 > X 
2 O H 2 •»* UJ 2 
(-u!3uU./»U< 


Z 

V 

>- 

o 

0 

a 

x 

ul 

-J 

< 

O 


2 

O 


$! 

_» 

a 

x 


s i 


z | 


O 

a 


>1 

o 


Lu 

O 

a 

o 

u. 

2 

O 

CO 

< 


> 

O 


237 


UNEMPLOYMENT RATE 4.b 3.? 3.4 

















DFlA*AKF TABLE 15 (continued) 


ACDA/E-156 


— I tf 


* if o i 

1 1 

if i 

« _ — i 
C 

IT C 1 
U -i 

uu c 
2 Crl 
u. cm 

Q K — 
UJ 2 

u. u. | 

U l, —■ 

*- o r-' 

C Ll I 

a 3 


If 

4 

C 


— «\ 


— cm 

a — 

I 

if 


«r a r a c 


arc 

' 7 


A 


cm cv tr a cm ir ir a if 
: I — 

! 

r 3 0 . aa »• 0 — c a ir a 
• ••••••••••• 

I r III — 1 - ap. f 

l I i lilt- 


c c c c c c c 


c c — c. c 

I I 


4 

a c ir. *«« a 

a 

A<(j 

: r., 

«- 


0 

• 

• •••• 

• 

• » 

■ • 

♦ 

•i 

• 

1 

» *-a r 

r 

c 





1 


A 

1 


i 





»l 

t 


• 


r- 

i 

* <\ it r* r* 

CM 

r c| 

i ^ 


r j 


• 

• • • • • 

» 

• « 



• 

i 

t 

1 

2 
4 

3 

A 



M 





*r 








l 

1 

i 


•; 


a 

If — « Af 

a 

-. C j 

c 


C! 

* 

• 

« » • » • 

• 

1 • 

♦ 

• 

• 

r 

A CM — — | 

• 

1 A 

r 



«T* 

1 

till 


* 

• 







11 

1 


”1 


• 

• • • • • 

• 

• • 

• 

• 

♦ 

• 

c 

c c c — c 


C CM 



•— 

<N. 

1 



1 



1 . 



c 

u 

u 

u 


— «. ccccccccc— c — 

4 — II 

I 

o 


c c e c — c cm 

I 


c r 
I 


— c 


— CM 

I 


V 

0 


— c 

A — 

I 


c c. c c c c c 

I I I I I I I 


c c — c - — 
• I I I I I 


c c c c c c 

I I I I I I 


c ir 

I I 


a 

I 


u 

2 la. 

c - 

— c 

3 
UJ _ 

S Q 
s^s 

3 • C 
cn n t_ 
& 

If 


c. 

I 


c c c c 

till 


r c 

I. I 


c, — e c c c 

it till 


ecc—c— 

I l I t I I 


4 

l 


cm 


c ai f h air a f: r 
- CM — 


If A 


<r po a f c o —> o 

cv — r k —■ 


f 

CM 


c 

c 

If 


4 — 


CL — If 

r • 
cm rr 


X c. 


it 

0 ^ K*. fV» CC *-l *■*• © 


<C 

CM 

c 

C i 

A 

»• r- (V. ^ r- 

CV *- 3 K) —V 

m 

4 


ir 

— c 




CM 

If 




X c; 
2 ‘ 


U.’ 

u. 

2 — 

c c 


c cooooccooooooocecooo 


c — 


—< o 

I I 


u ^ 

Hm u 

W > 

X 'CC 
g »u 

as I'¬ 
ve 

If 

a 

C X 

UJ C 
X la 


>r, c. r. a- 


—■ c — ir tf cm 

— CM — 


a if f 


eo ir pm « — c — r~ 
CM —I a K 5 


If 3 


A-C'-K'aAaiff 
— CM — — 


crirjcMC—io—if- 
CM — 3 « 


CM 

o 



H 

»o 

0 


r> 

• 

CM 

IT 


CM 

r-. 

: 


a- 



K 5 

a 


K> 

• 

CM 

it 


CM 

•o 


u. 
z — 

cc 


n 


e o o o c. 


OOC.C O O C OOOOC.—I CO 


CM —i 


I 


o 

I 


05 _| 

w*n x 

Hao 

o • c_» 
« O' 

n 

«p 

x 

1 X 

o c 
_j u 
2 


CM 


u' c r a — c 


— f f A a O' 
■M 3 


a a r 


cm cc — — — a 
\l 3 a fO 


CM 

o 


r. 

o 




>o 

4 

CM 

If.' 


CM 

K) 




o 

CM 


H 

O 

— 

KJ ^ 

M 

a 

X) 

A* 

4 rO 

Cw 

AJ 


9 

— A- 

o 

CM 

O 





•H 



•H 


CM 

— 



•a. 



CM 


3 

IO 


O' 

«-* 

K) 




















CM 

fl 


CNJ 







a. 






















3 






L. 

Jf 




UJ 



►- 









O 

A—C 

UJ 

IS 




UJ 

If 






Z 


K 







X 

v~ 

cc 

z 




X 

UJ 



< 



UJ 


2 

UJ 






X 

X 

3 



if. 

5 

"2 

If If. 



h- 



X 


UJ' 

u 







Ua 

*— 

X 


UJ 

UJ 

I- 

3 2 





— 

>- 


X 

a: 




2 

i- 

3 

H 

»-< 

lA , 


-J 


o 

O O 



UJ 


> If 

o 


V 

o 


u; 


5 

o 

_J 


2 

»—< 


O X 

< 

X - 





c uj 

3 


© 

u. 


X 



3 

1 ^ 

D 

X 




X 

u. 

UJ *- 



• 


O O! 

a 


3 





K- 


5 

X 

3 

X t/ 

>■ 

X 

1 


X < 



a 


X 

X 


M 

Y 




u 

O 



u. 

3 _l 

X 

Ul 0 . 

z 

< u 

Id 


i 

If 

2 O 

UJ 

O 

X 

5 

V 

-j 



cr 

uJ 

< 

1 

X « 

UJ 

> 


< 

* — 



If UJ 

< U. 

— 

UJ 

cn 

X 


o ar 

X 

-J 

U 

T 

1 13 

2 


X 

X 

1 2 

h- 



U 

i— 

3 

h- 

2 

< 

H* 

u 




»—l 

»-4 

U 

k— M 

— 

X 

y> 


•yi 3 

*-4 

UJ 



-J c 

< 

< 



un 


—* 

y» 


f“ 

j: 

c 

2 X 

I 

o 

i 

o 

2 X 

-J C 

1 

> 

r*»i ^ 

►— 

3 



X 1 C 

zz 

“9 

o 

X 

aa 

2 


u 

— 

X 

i/I < X 

r -4 

< 

2 X 

> X 

o 

3 

• 

• 


J. 


c 

3 

X 

< 

■w 

X X 

4 

o 

«•« 


X o 

r* 

X 

►1 

uJ 

— a 

1 - 

a 

> 

> 

▼ 

< 

* 


X 

— 

a. 

-1 

X u 

X 

X 

< 

X 

f- J 

3 I- 

UL 

-0 

o < 


3 

-4 

-4 





















a 

u 

o 


238 


JUFMPLOrMfNT KATE 














O^T.^E CPliiMnTA TABLE 15 (continued) 


ACDA/E-156 


—• «T., 

«- If « — 


C ti. » 
C. —. 


u 

U 

JL 

Z 

Ui 

o 

u 

u 

u 


— c\ 

er — 

I 

If.: 


cl — 3. « r- 
—. — cv — r 


a. •* 1 


I 

* 



w c 
u - 

9 

cv 

u u. cr 

3- 

cv 

r c i 



u cv 
OK—, 
UJ T i 
U U 


3 

li L- — 

3- 

• 

— OF 

•- 

• 


. r . * 

A « A A 3 


a O 
• * 
- I 1 
I 1 


c c c c c 


— — c c — c c 

« — 

I 

ei 


IT 

: 

cv CL a 

C Lh 

t 

AN 

1 

C.I 31 

*4 ^ 

«'* • 

. 

1 

i 

1 

K 

1 

i 

*L 










• 

• 

•i 

• 

3 

cv cv 

cC cv r 

1 



CV 3 

35 O 



c: 

1 



i 

• ^ 




1 

i CVi 

- 

{ 




■ 


i 



i 


II 



»! 


3 

K 3 c 

cv 

» r 

3 

1 f. 

CV' If 

X CV 

IT 3 C 


cv 

o' 

c 










• 

• 

• 

• 

3 

CV 3 

ec 

3 C 

1 


^1 3-4 

CV If 

3 N 



3 




• 

CV 





3 - 



CV 

1 




1 

1 


i 

1 


1 



1 

i 


X 

0 3 0 

3 

C\ — 

X 

X 

3 — 

cv c 

C K C 

X 

3 -‘ 

3 1 

0 

• 

• • « 

• 

• • 

• 

• 

• • 

• • 

• • A 

• 

• 

■ 

• 

l 

— O' C\ 

c 

- cv 

3 

C\ 

cv cv 


- i r 

cv 


A 



1 1 • 

•- 

1 cv 

1 

1 

1 1 

i i 

1 3 

1 


C 




C 

1 



1 


i 



1 













J 

«• 

c 

cr c cr 


c cr 

c 

c* 

c c 


3 — 3 

cv 


CV 

3 



i 

1 

» 


1 

t 


1 



1 











• 

i 

• 

• 

c 

c c c, — 

c — 

C 

c 

c 1 c 


m — if cv 

CV 

¥ 

ir 



• 

1 

1 


\ 


i 



1 



K 

m 

c 


c 


►- A' — 


c c c c c 

I I I I I 


c c c 

I I I 


C. — C C C C — C — — If 
I I I I I t I I I I t 


cv 

I 


3 — 


u 
z u. 
c — 
— c 

_J 

u _ 

£ . 
a ** 

3 • C 

» r u 
c 

¥ 

x a 
c * 
•— c 

X L. 


CCCOCC-CCeceeCCCCCV— 3 — C 

I I I t I I I I I I I I I -1 I I. I I I I 


c 

I 


C — CL X C — — 


cveac.3-, xiT3CV30.3©k — cvj »»• r- a 
— — — ir*-CA^ f A - 3 • 

— — 3 0 3 CV 


O — <L X C — — 


AcacfvOinsNfac^s — m 

r- «H — f C •- f 

I •» »• 3 0 


IT 

3 

3 


Z 

C 


ti. 

U 


oooeoooc 


oooooecocoooo 

l l 


— cv 


o — 


H X 
tu 


CQ K 
' X 

t*> 

O 

UJ 

5 . 


C 

>t_> 


a 

z 

w 

u 

z 


CT — X X C — hNC N C 


X .T. 3 Al Ifl ff S ^ 
— IT h ON 


35 

IT 

3 


C — X i£C-hAONC 


Xtf 3 AiflJ'NOin 
— f ^ O N « 


CV 

in 

3 


35 C — 

CV «h iTt 

O' 3 


CV 

o 


c 

in 

3 


U 

U 

2 *-> 
OC 


00&OCOC.OOOOOOOOC HO WHO 


H lO 

I 


« 

K ~ , 
M ** f 

8 3C 

S * u 

r. 


0—3. X © — - AON or" X U 3 


cv 


tv XI O' 

r> — 


a — 

O N- 


n 

3 


3 

CV 

0 


O CV 

— n 

3 


* 


*-4 ^ 



H 

H WO 

N~ 

O 3 ) 

X) a* 

3 fV 

n cr 

N- O CVJ 

O' 



O' 

k ?» —t 






3-4 


•~4 


if, 

O K 

3 

3-4 

—f 


o o 












3 ^ —k 

3 

0 ^ 


3 

_1 u 










» 







Z 


1 








i 


i 







t 


3 

wt» 

-J 

» 


X 

in 


u 

i 



1 






O 

3 -* 

UJ o 



uj m 




z 


K 






Tt 

K 

a: z 



ar Uj 


< 


Ul 


2 

UJ 





a 

X 

o — 


in o 

d m 

in 

►- 


z 



O 




in 


aJ 

— T 


UJ UJ 

k r 

Z 

in 

*- t 

V 


i 

X 



~T 

h- 



—i i/l 


_i 

u o 

o 

Ul 

> m. 

o 


>- 

o 



o 




Z — 1 


U X 

•« X 

** 


o uj 

_J 


o, 

IL 


Y 





cr -J 


— X 

U. UJ 

U- 

• 

o u 

1 


—J 








Z X s> 

>- 

X I 

Z X 

< y 

X 

X 

z 

«T 


X 


K 

u 

c 


H 

U. Z) -i 

a 

uj a 

z < 

O UJ 

t 

in z o 

UJ 

o 

Z 

o 


>- 

z> 

ir uj 

3 

i a < 

UJ 

> *-« 

< B 


in ui 4 u. 




ro 


n !1 

c X 

a. 

u 

X 1 U 

z 

i 

Z t 

Z K 

z 

u — 

-J 

*— 


< 


3 - O 

r ►“ 


•-3 

»-e 

Ui • 


x in 

in 

o.*-» 

UJ *“4 

— -I c 

< 

<r 

3 i 

•J 


y. •-* 


O 

H- 

cr 

ac z z 

X 

o t 

v> Z 

z _» 

3 1 

>HUJ| 


-J 




■“* *v* 


o 

X 

3 j 

z —• UJ 

u 

t~ X 

in < 

z,« 

< z 

X > z 

o 

D 




r 

c 

c 

UJ 


XXX, 

< 

o - 

*-• X 

0 ;>- 

X — 

Ui <“< *! 

r— 

a. 

> 

> 


KH 

Z J 

a. 

3 — 

u. 

J X J 

X 

z < 

X K 

Jpl-U 

<«. 


o 

a 

13 

3 - 4 J 

O 


239 


UNEMPlOYHfNT RATE 2 . 1 * 2 -? 2,2 2,3 



















FLORIHA TABLE 15 (continued) 


ACDA/E-156 


« ir ■ 

• 

v •«r 

‘ c ~ 

If c 
u —■ 
U U c 
7 O I 
U €V 
C h ~ 

U z 

it u 
U4. *■ 
•- ft ft 
C Ik' i 

a - 


■ 

o hr 9MOMf rh c. : r. a 


«> v r. »• r « ft « 


• • m 

ir vfl ft •»!•- —• r r 
i — l 
l 


IT. ft *1 

-* *o“! 


if h « r * if c ft o rc»c<Mf «r 




— <v ftftrrr r 


h ft « r, - ^ ft s 3 

'.i ft i 

• i 


ftl 

•I 


c>. O «i — —. ft if c a if **■ a cLifiraair 

fT • ••<*•«•#•«•• ••«««»» 

^ Ift »» - Iftft-.c i c If ftft- II 
l I I I li I r. i • | i 


ccc 
• • *i 
l l ft 
K 


ft 

I 


* 

♦ 

I 


«l 

r 

t 


r* 


o 


a\ 

9 

ft 

a; 


c 


vf 


ft 

ft- 

c 

3 


c 

ft* 

c 

— c 1 

ft e 

¥• 

r 


c 

c 

C ft 

ft- 

ft» 

3 


e 

ft 

It 

ft 










11 

t 

* 




ft- 

ft 


ft 

ft- 

ft* 

» 

V. 

1 



















1 




A 

If 























it! 

W 























c 
























u 























4 

it 


ft" 

ft 

c 

If 

ft- 

c 


ft- 

ft- c 

a c 

3 

3 

c 

c 

c 

ft cr 

If 

ft* 

C 

ft 

3 

c, 

u 

a 

w* 









» 

1 

1 





ft 


*ft 

*■» 


ft 4 

►- 

1 



















8 



1 

c 

f\ 



















. 



1 

















































0 


c 

c 

c 

•» 

C 

c 

c 

ft* 

3 - C 

*- c 

3 

0 

ft 


c 

3 •- 

If 

c 

c 

ft 

K 

c 


ft 


1 

* 

1 

I 

8 

1 

1 

1 1 

- 1 

» 

1 

1 

1 

1 

1 1 

1 

8 

r •• 

ft 

ft 

If 

u 

! 










1 









1 

1 

1 



ft* 
















































k 



c 

3 


c 

ft- 

ft* 

c 

ft c 

O 

3 

ft 


c. 

ft ft 

ft 

ft* 

cr 


If 

0 


2 U 

c 

1 

• 

1 

1 

I 

1 

1 

1 1 

1 1 

1 

1 

1 

1 

» 

- I 

ft 

1 


U. 

3 " 

If 


c 

ft. 


r’ 

r 


i i 


340 JiCiCftC ftilfCrw<4iCifer<iC ft. O 3 ft *1 
ft if ir ft ft — ft ftti'aft — ocrooc. c ft ft 3 • 

— — •- 3 •- if •*" »- vf a *- if if 


ft ft 


ft 


lOccirifftft—•K'Cr 3in»-ftftjftcr<tft)^-ft^> ft o 
ft ftif ^-ftft^-ft ciferft — ccftccc if — 


if ft ft •- 


if 

ft 


ft 

ft 


3 

a 


cc 

If 

>c 

ft 


u. 

li. 

2 -* 

c. c 


©oocoeocoooc oooo-<—icgoo if »» ft ft 


H X Q. 
W 7 

5 * C 

§ *<J 

« ft 

C 

1 ' 

a 

o s 
u c 
a u 


u 

It 

2 ~ 


_l 

« J 

ft- 

3 • UJ 
M J 
S) 

4 

X 

£ a 

o o 

-1 u 

2 



<C X ft 

if 

ft- 

ft- 

-rc 

X if" 

ft 

Cr 

- it a 

C ft C ft —* 

ft 

iC 

ft 

y 

ft 

s 

ft- 

ft- 

if 



ft m « 


3*1 

3 

O' (\. H 

e c 

— «c ® 

3-4 

« 

ft 

r- 

• 



•— 





•— 




if ft 

if fft 

if 

3 

39 

X 

3 







1 







n 

ft 

• 

ft 



<C ffi 

ft 

if 

ft- 

ft- 

e ra 

if if ft- 

O 

- vC O 

tr ft 

ft- ft *1 

ft 

if 

e 

ft 

X 

ar 

ft- 

ft- If 


3-9 

tv m -* 

3-t 

9—9 

3 

CC ft! '-I 

0 c 

—1 ® ® 

0 

CO 

(ft 

ft 

• 








3-* 




JD ft 

f Ift 


3 

*-» 

X 

y 














ft 

ft 


ft 



ft 0 

ft cr. 

G* 

O 

0. 

n. 

0. 

•- O 

O 

3*4 

1. 

0. 

p. 

if Ift 

if O C 

ir 

*ft 

O 

Ift 


Ift 













ft 


ft 

1 




c a 

3 

f 

ft 

ft 

k* cr 


if 

3 

— It 0 

r a 

3 ft If 

■y 

c 

y 

0 

X 

•M 

h- 


n 


•*M 

■-i r^> 

r-d 

**-« 

3 

O ft -t 

-a 0 

ft -0 ft 

H 

CT> 

ft 

ft 

• 



0-3 





3— 


3— 


If. ft) 

sC ft 

it 

3 

3-9 

X 

y 














ft 

ft 


ft 



X X 

ft 

fi 

0 

ft- 

onj 

K; J' 

f) 

SOil 

3 ft 

k ft if 

ft 

ft 

3 ‘ 

0 

3 

•-* 

ft- 

ft- 

if 



ft IT — 

3 -* 

•-* 


CC (V 39 

0 0 

~ X ft 

cr 

0 C 

3 

ft 

• 



rft 





3-1 


-4 


fl ft 

3 ift 

fi 

3 

-H 

0 

f 














ft 

ft 


ft 









u. 

J 




X 



tU 


N— 






5 


Itl 

O 


M 

U If 


ft 


z 






a 

V- 

X 

2 


~- 

X Itl 


< 


UJ 






a. 

X 

3 

►— 

If) 

0 

3 If 

if. 

ft 


X 





If 


it 

1— 

r 

Itl 

Itl 

f- r 

z 

If 

ft 

ft 




z 

1- 

_i 

►- 

*-* 

if 

_l 


0 0 

0 

aJ 

> If 

0 





0 



Z 


0 

X 

< r 

** 


Q UJ 

_l 


*r 



— * 

—• 

0 

X 

-1 

1—• 

X 

u. u 


• 

O O 

X 




1—' 


JL 

-t 


X f 

ft I 

1 

3 x 

3 

If X 

X 

X 


►* 


u 

0 


1- 

u. 

3 -1 

X w 

a 

z < 

O 

Jj 1 

if Z 0 

UJ 

>- 

-j 



X 

It) 

« 

1 

a «* 

UJ > 

«* 

< * 


-* If UJ It 


X 


O 

X 

a 

_/ 

u 

X 

I CJ 

2 

X 

X 1 

2 

ft z 

u 

-J 

►- 

u 

2 

W-. 


*■4 

l— 

UJ 

1— I- 

—• 

If 

If 

s 

1— It) *-* 

1— J 0 

< 

^1 

•■M 

M» i/1 

c 

►- 

X 

£ 

Z X 

X 0 

1 

0 z 

X 

_J 3 1 

> -* Itl, 

ft 

3 

a z 2 

0 

X 

£ 


>-t u 

U ft 

X 

If « 

x 

ft! < Z X > X 

0 

—• 

0 

3-* 

0 

0 


< 

3 

X X 

< 0 

3-5 

-* a 

O ft- X 

Itl —* X 

ft 

▼ 

3 

s£ 

u 

u. 

r-» 

U. 

-1 

X u 

X X 


x •- 

u 

3 ft It 

if U 3 




i» 



z 

It' 


UJ 

u 


X 

X 


ft 

0 


0 

It 


_J 



X 

X 

5 

X 

0 

#■* 

UJ 

£ 

ft 

z 

« 

< 

—. 

_J 

_j 



3 

• 

• 

a 

> 

> 

0 

— 


a 

0 

O 


240 


UNEMPLOYMENT rate 














GC0RG1* TABLE 15 (continued) 


ACDA/E-156 


<- X « 

I 

V »*f 

c • 

tr c 

u 

uu <r 
7 Crl 
U CV 
ai»~ 
tu T 
u. u 
u v. — 
— a e 
c u i 
a —• 


- r 


— r- 
• • 
cv t 


r- r 

• • 

tv — 

i 


¥■ r 
• * 
I v 
I 


(v c <cc a h cih it 9 it c c f. c <v 

* • • • • • • • • « • •• • ® ». 

cJ cv r-e-cv «v |»r tv c » *- - - - 

’ , IV 


— cv r ir' 


«3 ,f . 

cj tv 

I 

c tv 

4 • 
I I 


CM 

cvi 

1 », 

, I 

tfCCKO^^3lf0AHflf <MT c, 

••••••••♦•ft ft ft ft ft ft •• 

r- to c i m 

iM a | r, 

i • ; • 

x tv it e x x x x c c x r- tv c 

•••••••••ft c e • ft o » • 

f «■ o fKrtvtvo^-ii ir 

I I I I I <9 1 II It K 

i I 


r 

I 


9 

•( 

O; 


tw 


K O' 

.3 - 
7 

0 X 
• * 
r 

c 


if 

li 

L 

Z 

U. 

tt 

u 


y. 

a 


« 

l 

ur 


« 

i 

c 


f'- 

» 


u 

Z u 
C t- 
— C 

J4 Ij 

L»» 

h a 

O a 

Xc? 

S • c 

«to <_> 

c 

x 

x a 

«£ * 

— C 

X U 


IL 

U. 

z — 

c c 


h jc a 
W X 
y X C 
fcj » (_> 
« 

X 

a 

c x 

U 1 O 

2 o 
z 

3 


u 
u. 
z — 

C X 


& Ti a. 

O i 

S 9 O 

M J* ° 

XI 

«C 

X 

< y 

D O 

_l «-J 

2 





















cv 

•• 

c 

tv — 

K 9 


o- 

c x! 

c 

if C 

c c 

© X 

^ O" 

•-V 


^ 

X 





9 





• 


i 1 

1 


•» 

cv 

1 



i 

fv 















1 

• 

ft 

«! 

• 



tv 

c 


9 \C 



c, 9 


f — 

c c 

c « 

9 9 

- X 

« 

« 

X 




1 





1 s 


1 1 




tv 

1, 

i 



•j 

1 

1 

CVli 


c 

c 

c 

— c 

*- C 


C 

C if 

c 

O 9 

tv c 

C X 

— tv 

i 

C X 

X 

X 

•r 1 

• 



1 

1 

1 1 

i 1 

1 

r 

I 1 

1 

! ! 

1 t 

II 1 

t 1 

1 <V 

u 

cv 

X 

K 















1 

i 


1 




9 

• 








: 











c. 


9 9 



c — 

r~ 

C CJ 

r~ c 

© a 

r. t-v 

C 

X 

9 

(V 

r 


0 

1 

» 

* 1 

1 3 

i 

i 

. 3 1 

i 

1 ! 

1 1 

l i 

i - 

1 

4f 


X. 















i 


i 






-j 


0 9 — C. 

if) 


— c 

a: 

K. T~- 

c r- 

r, c 

X ^ 

tv 


X 

X 

G 

X 

a 



C 9 

C - 

* 

o 

(V If 

o- 

(V 0 

X — 

O- 

cr tv 

c c 

a 


X 

r- 

ft 












#»• 

K" 

r 

a 

o 


a 

K 
















9 

• 




if in tvi if in 9 

>£ 


(VI c 

0 

9 0 

— tc 

K1 © C X 

CO tv 

o 


9 

to 

I 

X 




O 9 

a — 

K- 

tv 

tv if 

9- 

fV C 

X — 


« K- 

c © 

to 

K 


X 

ft 





•— 








to 

r 

a 

0 


a 
















*■* 

3 


•H 



o 

o 

O G 

o o 

C 

c 

o © 

o 

o o 

© o 

O OH 

O 

o o 

9 

CJ 

9 

o 


«£ 















1 

1 




if. 

9 

lT 

If. 9 

X 


(V 9 

c 

C h- 

c r- 

r. 

a x. 

X ++• 


tv 


tv 

tv 

X) 

o 


0 99 1 ** 

•Tj 

CJ If 


— c 



K tO 

O C" 

a 

X 

X 

O' 

• 





*C»* 







IT 

to 

IT 

a 

o 


X 

to 














, 


3 


e-H 



if 

9 

— If 


X 

— tVJ 9 

o 


© r- 

x 

« X 

CD 


9 

X 

<\l 

9 

9 

o 


a 9 

o» — 


CJ (Vi if 

•-4 f?' 

o — 

H H 

CO to 

o c- 

® 

XI 

X 

O' 

ft 












IT 

o 

to 

a; 

o 


a 

pr 















" 

CT 


v-4 




o 

H O OiW 

— c. 

o o 

0. 

0. 

1. 

O 

o n 

•-1 ^ 

o o 

X 

X) 

■M 

H 


</ 















• 

1 

i 


















ft 

• 



X 

if 

0. f> 

V/ 1/ 



Og 9 


X X 

© oc 

•r cr 

© a- 

tt X 

tv 

3 

c 

X 


-ii 

0 


T 9 

O' — 

■o 

V 

(VI f> 


— O' 

o — 

H H 

o to 

o x> 

O' 

s» 


O' 

• 



— 







ir 

m 

to 

a. 

o■ 



















3 


^4 




j 


9 9 

ifl 


rsi io 

O' 

3 C 

0 r- 

rO if 

x ^ 

* XI; 

cr 

o 

r- 

c- 



L 


3 ^ 

3 — 

rr 

(X 

Cil if. 

•—4 

OH Q" 

l P oH 

•-4 

X to 

© X 

r- 

X 


o 

• 





—9 





■o 

to 

to 

X 

0 s 


•c 

3 


— 9 


UJ 

Of 


► J 

X ~ 

t- O 

XI — 

Z X 

c o 

z « 


•9 

o 

M 

e— 

u 

3? 

z — 

— l/l 

z z 

— o 
x •_> 


o -j 

© — 
a t- 
U X 
X a! 
*—_»»— 
U -I 

~ — z 

Z X u. 

o y- 
a u < 

x _J vx 

M M 

o *- a 
ox® 
o u/a 


uj o 

X. z 


— if 

z — 

X -J 

; i / >■ 
U 3 _J, X 

i a < u 
X I u z 
yt-x- 1 
® Z X X 
x >~* UJ <_» 
3 a x < 
-» x u x 


S_ if 

►—I 

3 X 
/O j 
uJ LU 1“ 
_l O 
U X < 
— XU. 
I » 3 

uj a. z 
> — < 

X X 
X Lfi 
O I o 
h il/l 
O — — 
I 4 J 


if 

UJ 

vA i/I 
3 Z 
O C' 

X - 
UJ *- 
X <1 J- 

< U'Ul 
T* — — 

• Z, 4 - 
i/> 3. — uj 
2I'J3 

< X < 
X O ►* X 
*- U»' 3 — 


y- 


z 


»- 


UJ 

<x 


UJ 


z 

UJ 

3- 

y— 

1 

z 


Ul 

u 

< 

x. 

H* 

>- 


Xi 

X 

X 

UJ 

> X), 

o 


►, 

o 



o uj’ 

-J 


O' 

u. 

t- 

• 

X o 

a 


-I' 


z 

at 

X; 

2 

•ft 


X 

u. 

i xi 

z o- 

UJ 

6 

X 

o 

X 

if UJ 

< u 


— 


a 

>- 

z u 

•-I 1 

-1 

t- 

z 

a 

o 

W 

-JO, 

« 

<t 

3 1 

-J 

-1 

1 > 

— Ui| 

t~ 

-j 



a 

z a 

> X 

O' 

3 

«i 

* 

*1 

— Ui 

— at! 

H*' 

a 

> 

> 

ul 

u. >/) 

u < 


o 

— 

—4 

2 


1 


a 

o 

u 

3 


241 
















TABLE 15 (continued) 


ACDA/E-156 


< 

c 

T 



IT a 


ll 

u 

• IT 

< 

_ w 


C 

V t 

u 

— 

C 

u «r 

2 

C 1 

u 

tv 

o 

K 

u 

r • 

u 

u 

u 

L — 


o r- 

c 

k. i 


a — 



x 


L 

c 

o 

1 

2 

r 

UJ 

•» 

or 


k. 


u 


u 

tr 

#•. 

l 

c 

tv 

A 


If 


a 


►- 

a 

u. 

• 


u. 

Z U 

c - 

p~ c 

ui ~ 

H IT 

W w 

S o 

if > 

g -C 

” r. o 
o 
a 

x a 

c > 
p- c 

T V- 
2 


u 

u. 

2 — 

c c 


O _J 

s« 

Sr-’ 1 - 

X 

A 

a 

c x 
u c 
x c. 
7 


u 
z •- 

c r. 


H *“ 

Id f L 

a c u 

r. 

A- 

a 
x > 
o o 

_J u 
r 



! 

— it r. ; «. a- 

ir 0. 

: 

hojh tir ir 

1 

a- "W 

tv If. 

If 

If. cl 

1^ 


oJ 

1 

* 


* 










•| 



^ m if 

r t\ 

tv 'If A < ^ 


tv r 

r; 

e , 

tv 

r 

tv> 





1 II 

1 



(h 

1 

• 

1, 




1 


• 



«i 



1 




A it tr ' a if 

I 1 Cl 

tv 0 tv a a c 

1 

* r ir 

A- 3 

3 

i 

* c 

3 

a. 

1 

3 



3 










* 

• 



tV <V CV A~ 

3 tV 

r A rt a 


tV 3 

3 

A* 

If 

A' 

IT 

•— 



1 tv 


► 1 IM 




A*' 

•I 

■1 

»• 

1 




if 3 s 

if tv 

if r ec x tv a 

e a a 

CN. « 

r 

m- C 

vC 

»*- 

C 

3 

1 















- 1 c 


e A C 1 — A 

^ l» 

i 

i 

I- 

If 

r 

«; 

tv 



1 

I 

III - 1 

1 1 1 



»A' 

1 

1 

3 




1 


1 




1 



1 










1 

' 


| 

d 

• 


tv 

c c e e c 

c c 

c c c c & c 

C C C 


tv 

C If 

C. 

X 

e-r' 

X 





1 I 1 




1 

•* 

tv 

i 




- 





1 , 

1 

1 

i 




c c — — c 

c c 

c c c c c c 

C C c 


r 

s 

c o 

tv 

tv 

f 

If 





1 1 1 




w- 


A" 

i 









1 

1 

1 





• • • • • 

• • 

*••••• 

• • • 

• • 

• 

• •> 

• 

• 

• 

• 


c 

c c c c c 

c c 

c c c c c c 

c c c 

c c 

c 

C 0 

c 

* 

0 

ct 


v 

• 1 1 

1 

1 1 1 1 1 1 

1 1 t 

1 

t 

w~ 

(\ 

tv 











1 

1 

1 





cce.cc 

c c 

c c. c. c c c 

c c c 

^-1 

tv 

c c. 

X 

K 

A 



0 

• till 

1 1 

1 II 1 1 1 

1 1 1 

1 1 

i 

1 

1 






C c C if c 


X C - O AO 

f~ 3 K5 

•- r- 

0 

CJ X> 

3 

A - 

a 

c. 

e 

a. 

c. tv 




^ — 

X 

a x 

w 

A- 


tv 

• 









K 

x 


PC 



r c O IT C 

A- — 

wC-CAC 

3 3 A) 

tv r- 


r> lC 

C 

c 

tv 

e 

0 

a- 

tv <\ 



•— 

3 — 

X 

Q *£ 

A 

A- 



• 









A- 

X 


K 

AV 

• 

e c c e> c 

e c 

0 . 

0 . . 
0 . 

0 . 

n. 

0 . 

o c c 

c o 

o 

o o 

o 


H 

o 


•f 



1 




1 


1 

i 

• 



C c c r c 


lfCr.CA0 

^ 3- PC 

tv A- 


K*/ 

X 

A- 

CT 

X 

A» 

IT 

<V tv 




* —‘ 

vC 

« x 

X 

3 


<VJ 

• 









A - 

a 


r. 

X 


ff oc ire 

«- 

IT O — O <V O' 

3 3 A" 

tvi A* 


IT. 

If) 

X 

0 

X 

O' 

3 

tv ou 




3 

o 

® If) 

X 

a- 


(V 

• 









in 

r 


in 

X 


c. <*> o o o 

O O 

c. 

0. 

0. 

0. 

0. 

C. 

o c- o 

c. O 


o o 

cv 

A~. 

A) 



a*. 








1 

1 

i 



C c c x c; 

r- ~ 

vC c *- c A 3 

3 3 A: 

f r . a 

•— 

A- A 

(V 

•A^ 

ff 

X 


% 

M M 





o 

«C 3 

if) 

3 

H 

CVI 

• 









A*. 

® 


PC 

X 


a => 3 J"» 'J 

f*** H 

J10H3A* 

Ki 3 IO 



•O A- 

O 

3 

i 

H 

A> 

X 

«a- 

(\ <v 



0*4 


x> 

X 3 

X 

3 

<v 

tv 

• 









(O 

3 


■o 

3 







o 

J 



X 

X 




UJ 



M- 










o 

UJ 

O 


^-4 

UI 

X 



M 



Z 


►- 


UI 






O' 

1 - cr 

z 


•»* 

a 

UJ 



< 



UI 


z 

UJ 

A- 






a 

x Z 

t— 

X 

o 

x 

X 

X 


►- 



X 


UJ 

Kj 

< 







UJ 

X 

UJ 

u 

1 - 

«■*. 

2 


X 


A- 

> 


X 

X 

a 




z 

p- 

_j 

i- «- 

X 

-J 


u 

5 

O 


UJ 


> X 

o 


V 

O 



v*_’ 


o 



z 


u 

a 

< 

x 

i-* 




o ui 

-1 


o 

U. 

A- 


X 


M 



a a 

-J 

>— 1 

a 

u 

UJ 

i— 


• 


3 u 

a 


_J 


z 


X 


1 — 



X 2 

X X *- 

r 

i 


a 

« y 


a 


a 

X 

2 

a 

X 

w 


►— 


u 

c 


A- U. 

3JI 

UJ 

a 

z 

< 

U UJ 


l 

X 

z o 

UI 

O 

T 

O 

X 

>* 

-J 


3 

rt 

u 

< 1 

1 <U 

> 

*-i 

< 

X 



X UJ 

< u. 


PM 

UJ 

cr 

A 

X 


a a 

a 


o a 

1 u z 


X 

X 

l 

2 ,»- 


z 

u 

PM 

J 

A- 

z 

< 

o 

r~ 

u 

~0 

p- 



— UJ 

1 — l“* 

a 

X 


X 

3 m 

vJ 

<-4 

PM 

-J o 

< 

< 



_J 

lO 




w 

i- 

00 cc 

2 X X 

o 

1 

u 

2 

X _l Q 

1 

> 

PM UJ 

A- 

_l 



a 

D 

•V” 

*— 

rr 

o 

X 

CO J 

«UJ u 

i— 

a 

X 

< 

X « 

< 

z a 

> X 

o 

D 

• 

• 

X 



— - 

**1 

o 

Jj 

H 2 

a T < 

o 



a 

O A- 

a 

*-* 

oJ 

«a 


a 

> 

> 

UJ 

“2 




-X. 


X -J 

a -» x 

X 

< 

JL 

»- 

Ui3 

»• 

U. 

S\ 

< 


o 






















a 

<J 

u 

5 


242 
















H.L1NDTS TABLE 15 (continued) 


ACDA/E-156 




IT 


tr cr< 

I 

*” 

Sf 

• if 


< 

r 


v C. 


'x. 

to 

3 

¥ 

u cc 

Cl 


b 

cv 


a 

►- to 


L 

z 


u u. 


u 

C to 


to 

o f- 

♦“ 

c 

U 1 

0 »> 


if 

to. 

fv. 

L 

a 


u 

1 


7 

if 


it. 

at 

u. 



IL 

to 

•— 

u 

<r 

•»» 

to 

1 


c 

H 

If 

cv 


a 

—% 

c 

to 

f- 


LL 

1 



i 


c ir. r.ir. o a 

r. o « 

3 

0 3 0 X 0 ,¥. 

C. to cc cv ff j 

cv 

«» 

X 


• ••(••• 

• ' • A 

• 

* • • • • • • 

» • * • • •! 

• 




a «v,«v r 3 

n cv 


A> CV to 

cv *<r> o' 



¥ . 

i 

1 



to | 

cv 





• 

! 

1 

' 

{ 

1 



II 

1 


* cv o c c r- 

0 3 0 , 

K 

X X « 3 to 3 

I 

ir r a r c 

cv 

_ 

n- 


• • • • • • 

• • • 

• 

•••••• 

• • • * 

• 


. 


<v cv cv 3 ff 

cv ¥ 

3 

^ 1 C n n 

*v u 3 to 



Id 

i 




to- { 

¥<■■ 





i 

1 

1 

» 

1 . 



•; 


3 CL C. 3 3 If 

n c r 

c 

3 o to c r 3 

¥. to ¥ ¥ C 

o 

c 

r- 

•* 

• ••••♦ 

• * * 

• 

• • • • *i • 

• • » • • 

• 

• 

» 

• 

» ¥ to 1 to 1 

cv p cv 

O 

•-ff a ¥ ¥ CV 

to to to |f- 

¥ 


c! 


1 1 1 

i l l 


i - i i i i 

III f 

1 


cv 




1 

l 

i: 




t 

r c if cv c iv 

to ¥ to 

CV 

i 

to 3 CV to Cj C 

i 

ff C IT to »r' 

c 

<£ 

n- 

i 

• 

X 



3 

i to 

^ «-* 1 







1 

1 

• 

1 

1 


1 * 

1 

1 

1 





1 



1 

• 

¥ C X ¥ C f 


K 

to ir r- to to to 

CV CV to cv sf 

c 


«— 

If 



ir 

i to 

CN.' w- 3 OC 



cv 




i 

i 

II 



l 



to to r ccc to-tvcc 

x a 

»£CVtotoCVtoCV< 

X 

¥ 31 

3 

l l i l l l l l 1 f* l 

1 ¥ 

II S - 1 to | to 

f- 

X 


i 

1 

1 1 I 





I 


U 
i L. 
C - 

c 


•r cffcve«vcvtfcvfv.-.«-3ir. cv — r c ff cv c 

lllill*»»-ll-ltlCV»K| 

I I III 


F r> 


C 

a 


W to. 

H* 
to £• 
O < 3 

• c 
^ o 
0 
¥■ 


3 


z a 

C 3 
*-C 
X U 

z 


atcc^accx a xr^t^^t-xna ff> ir -« ff> cv a. 
cv *- c o sj»-x-'('rjciK'ir(\iMfif 

•- cv — 3 3 C i <\ a 


CVJ 

cv 

IT 

3 


C. 

ff 

c 


3- 0 

a r 

— ff 

3 


ff « If i«D<C«CC(C3lOC0 i^*->»-or«n.3« 

cv — c o 33 «XM^K 1 r^/rM<'iirii' 

*- cv — 3 an a. r, at ff 


<M 

if 

ff 

3 


ff 

3 

C 


O' ~ 

nj • 
ff 
3 


U. OC-COOOHCHCO(\irtOO(\l«JO& 3 to O X 

U. ff — I 

X *- 

c c 


i 

g 


.j 





















>— 


X 

or. 3 X 

a 

X 

X5 

CfC 

cv rr 

IT 

o c 

h- cv ct a 

K> 

3 

a 

X 


* 

r- 

cd a 

X! 

CM -• O O 


9 

3 


x r- 

¥) ¥) 

IO 

C X 

IT f- 

¥) x. 

K* 

3 


X 

cv 

3 

• 

3 



cv 




•- 




cv 

a. 

cv cc 

X 


IT 

© 


X 

cv 

xc 















’ 






• c 

















<r^ 




N 





















X 





















« 





















0 


X 

« 3 X 

<t IT 

X 


n- « 

(V 

H 

o o 

N C. 

O X 

fT 

cr 

r- 

o” 

X- 

o 

o 

C >' 

3 

CVJ 

O 0 


3 

3 

•—1 

X X 

m ¥, 

KV 

O X> 

lO 

CV X 

in 


H 

X 

rO 

¥i 

• 

u. c 



cv 




3- 

•o 


3 

cv 

ff 

cv ff 

X 


r. 

c 


X 

cv 

U o 

















•H 




z 

















•H 




- 





















U. 



0. 
2. 
t . 

o 

*■» 

*■4 

CV to XI 

o o 

r- 

<V H 

o c 

3 X 


o 

f" 





IL 












•H 




X 


3 

e-4 



c r 


* j 

Sxx 

D • u 

« a 

x. 

+ 

* Z 

o o 


AJ 


r 

X X f> ff 

c 

X 

0 

f- 0 

r. cv 

X 

o o f- n- 

¥ 

1^ 

«► Vto| 

Cto 

oc 

CV 


'4 

to 3 O' 


3 

H 

D X 


■v 

Ol'l 

¥) 

X 

O 3 

•o 

X 

CVJ 



CV 



*—c 

¥) 


3 

CV <s> 

CV 

« 

X 

ir. 

o 

to 















to 




c x) ¥> * 
cv —i c. o 
-< cv 


in 

X. 

X r- 3 CVJ to 

to 

P- 3- 

X r» 

X cv 

lO to 

3 

cr 

X 

K) 

3 

3 

to x. If) ¥) ¥. 

CV 

O 3 

m x 

cv X 

¥) 3 

r~ 

y 

X 

lO 



to "0 

3 

CV 

n 

cv so 

-0 , 

3 

© 

••4 

c 









3 



3 








u 

j 




a 

X 




UJ 



to 









b 


u 

o 


>-• 

UJ 

10 






z 


to 







a 

►— 

cr 

r 



X 

UJ 



< 



UJ 


z 

Ui 






a 

X 

~~ 

to 


i/> 6 

D 

1010 



fr¬ 



X 


UJ 

o 





X 


UJ 

»- 

X 


U UJ 

k~ 

r z 



iz*' 


to 

V 


z 

X 




z 

f- 

_! 


h— 



_j 


o o 



UJ 


> 10 

o 


>- 

o 


u 


o 

o 



2 

to 


o a 

< 

X to 





O UJ 

-J 


o 

u. 







c 

5 

-j 


X 

u. 

UJ to 



• 


X o 

a 


_l 





r* 

~ 

¥t. 

X 

** 

Z X 

>« 

X 1 


X < 

J" 


j: 


X 

z 

Z 

X 

X 




VJ 

6 


1- 

u. 

3 J 2 

ui a 

z 

< o 

UJ 


i 

10 

Z O' 

UJ 

o 

z 

o 

>* 



5 

a: 

Ui 

< 

T 

a. < 

w 

> — 

« 

* to 



10 UJ 

< u. 


to 

UJ 

CE 



X 3T 

a 

-J 

u 

a 

1 o 

z 

X 

z 

1 Z 1 to 


z 

U 

c4 


to 

? 

< 

►- 

o 

z 



—4 

to 

iU 

»- to 


X 10 


10 D 

M 

UJ 

#-4 

to 

_l C 

< 

« 

D 

-J 

lH 

1-4 


oi a 

r— 

X 

x> 

Z X 

I 

O 1 

u 

Z Z 

-j a 

1 

> 

to UJ, 

to 

_) 



or 

z 

7. 

o 

X 

X 

X 

to U U 

t- a 

V0 

< X 


< z a 

> X 

o 

3 

• 

• 


C 

to 

c 

o 

LaJ 

«x 


ar x 

< 

o - 

to 

a o 

i- a 


u- 

to X 

to 

a 

> 

> 

•y 

< 

T u 

X 

r» 

It 

-J 

1 UT 

* < 

X 

to u 


• 1. 

L0 

o < 


o 

»<• 

to 




















a 


o 


243 


UNEMPLOTMFNT RATE i.b 2.* 















IDAHO TABLE 15 (continued) 


ACDA/E-156 





cv, 

<o r.i c o cv. cv 

& a 

ec •» 0 

«t elr 

■nCC CV <C 


IN 

C- 

©• 


4^> 

«r 














< 

IT « 


cv 

« «v •> r « 

CVi cv 

1 

CV e- •» 


^-1 

cv r. r 

0 . 



CV 



1 



i 


i 

» 


1 


CV 





9/ 

•If 








1 





9 



c ~ 



t 





1 

1 


1 



1 

1 

u 



X 

cv O' r o r 

h- cv o a 

a r- r 


CV JT 

iC 3 c 

c 

a 

c 


cv. 

u 


a 

» 

e • • « •» 

• • 

• • 

• 0m 

• 

^ • 

• • 09 • 

* 

• 

• 

« 

• 

V 

U «C 


*1 

CV CV! CVi a If 

«Vl P" 


IT C f 


•1 ^ 

cv a a- 

c« 



X! 

•-rf 

7 

c*e 



«p> 


• « 

1 *1 








1 

U 

cv 



I ! 







1 



9 


a *- ~ 



1 







i 





u 

2 















u. 

U 


a 

- © r £T o 

cv — 

r is 

cv a it. 

V. 

tf - 

r o «- cv 

c 


tt 

S3 

cv 

u 

L — 

r 








r^: 





► 

o r> 


e 

« - i •- i 

c. cv 

Cv a 

c- 1 * 4 

C. 

CV cv 

- i *- l 

c 


c. 


c 

U 1 



- t 9 

s 1 

i l 

i - ( 

1 

S 9 

9 1 

* r -< 

1 


4 



a ~ 



t ' 



( 




t; 



! 

« 

• 

V 

i-V 

cv 

c 

e c e c e 

c c 

c c 

c c c 

c 

c cr 

— c cv c 


r 

1 / 

CV 

K- 

u 

cr 

•- 


i 


• 

9 t 




9 



1 


9- 

! 















2. 

If 








I 


1 





u 

•W 















c 











J 





u 



• 

• • • • • 

• • 

• 0 

• • • 

• 

^ • 

• • • * 


0 

• 

0 

• 

u 


«■> 


c c c c c 

c c 

c c 

c c c 

c 

c c 

— r\ c 

cv 

a 


CV 


u 

a 



» 


9 

9 9 




9 



1 


t- 

< 








1 







c 

cv 










1 





»“ 
















tr 
















G 

«■« 

c 

c 

vCC c c 

c c 

c c 

c. c c 

c 

c c 

c -■ c 

cv 

<£ 

vt 

r*, 


►— 



1 

1 t 1 1 I 

9 1 

1 9 

l l l 

t 

1 9 

9 9 9 9 

9 

9 





u * 


• ^ ... • • • • 

U CCCCCCC.C.CCCCCC.CCfC'CVCC — vf © 

2 U 0 I I « 

c - 
- c 
-) 


L‘J >— 


8 


• c 

tr c 

o 

* 


a 



c a to k c c o 

J«C CHMC JC c 

— cv r <c 

*■4 

CVJ 


CVJ 

© 


c. 

cr 

cv •- •- 

-- ir 

- IT If 


a 


CC 

« 

<c 

a 





cv 

C- 


cv 

a 


r c 

e : r~ 
^ c 
a *_ 

2 


cjjiroccjirr'iciMM^s'if. r~ jr 

cv — — — ir — 4 c. \t \^ a 

cv r- 

i 


a 

cv 


u. 

U, <£ 


c c 


oeocooocoooooocooeooc ft a 

• 9 I 


—9 O 


CJ — 


X CL if/ CV) «"• *“t 


8 *: 
m r~ 
•c 

+ 


X L 


c ir a *0 c ~ a i*". moAMnsK-, «».}(nifj a f" cv x 


tr in ir r~ a 
cv, r- 


<v 

cv 


a 


c loajrcoo'aKvirocvjc^fOa'O — —ai^if> 

KJ 


r> 

u> 

a x 

& 

tv —i f> tr —< X) vo 

r- 

a 

H 

© 

UJ O 



<v 



cvj 


u c-c<ocoooooc>oooooo-«o —ioo ei 

U, fO 
2 ►" 
c c 


• • 

K> O 

I I 


_J 
M -J 


hi ^ * 

o * 

G a C 

Z3 • V_t 

cQ o 


Si 

* 


1 
e a 
o o 
_j c; 

2 


CV 


o k 3 cc j 3 a r. k, c ci h k ai^. ——<if 

a a 

if 

<r 

Cv. 

vl 

r\j h u) h j! 


C' 

a 

•-< 

30 



(V 

f>* 


CVJ 


3i04 ,f )wOiTJ^i0O(\jM^4KjHH4 

<o a. 

CVJ 



o 

(\j »-*•-< uT h \T 

r. 

r- 

a 

•■i 

co 


9 

cvj 



CVI 








UJ 













3 

-J 





Cl 

■A 







o 

M 

uJ vT 

j 



*-* 

UJ 

uv 






or 

K 

T «. 

1 




G 

Ui 






c. 

X 

f ^ 

* 


O'. 

c- 

2Z, 

t/> 





IT 


u 

*- X 



UJ 

u> 

9- 






f- 

_j 

►— 

ft (T, 



_J 


U 

5 


Uf' 


o 

U 

_j 


Z « 



<J 

X 

4 

X 


ar 




-■o 

■ 

X _J 



•a* 

or 

U. 

u 


_ 


*- 


/ 

u. 

X X 

■S’ 

V 

X 

9 


2 


«- 


u 

o 



u. o j 

or uj 

CL 

z 

4 

V 

_j 


D 

O' UJ 

< 

9 a 

< 

UJ > 

M 

< 

* 

a: 



a. 

-J 

u 

X 9 

u 

z 


X 

X 

1 

»— 


* 

k~ 



»-< 

UJ 9- 

f 

0-m 

X 

</) 


l/> 



M 


D 9- 

X 

X 2 

3L 

X 

o 

1 

u 

Z 

D X 

z 

2 

O 

X 

CD 

X ~ 

UJ 

CJ 9- 

cr 


«4 



•— 

O 

o 

w 

< 

f X 

X 

«C 

o 



Z 


•t 

T 

J 

X 

r- 


-9 U 

o 

X X 

< 

X 

9“ 


1 










9- 


z 


9- 




< 


UJ 


z 

UJ 

CA 


9- 


X 


UJ 

CJ 

*» 

*. 


tA 

9- 

K 


X! 

or 

O 


UJ 

> tA 

o 


>- 

o 

m, 



O U 

-J 


o 

u 

f' 


• 

vD O 

a 


_* 


«t a 


2 

I, 

X 

» 

X 

2 

CJ VI 


1 

tA Z O 

ut 

o 

X 

o 

fi »-t 


lA UJ < u. 


ft 

u 

CD 

Z 9- 


2 

(J »4 

-J 

9- 

Zi 


Ol- 

UJ 

" JC, 

«c 

< 


_J 

X!_l O 

1 

> ft UJ 

9- 

_J 



T-* 

< Z 

X > * 

o 

D 

« 

• 

C 9- 

X 

*-• 

ut — z 

9- 

a 

> 

> 

vJ, 3 


u. yj sj <t 


o 

t-« 

f» 

1 





a, 

CJ 

CJ 


I 


244 


UNEMPLOYMFNT HAT£ b.O <9.0 «,4 <4.2 ?.*» 















ACDA/E-156 


« V CC| 

» 

V •if 


c • 

b c 
u - 
g u «c: 

7 C I 
U <v 
a y 
w. r ’ 
u u. 
u c. — 
► or 
c u. • 


ir 


b 

a. 

c 

1 

z 

tf 

UJ 


a 


U. 


b 

—■ 

b 

«c 


i 

r 

<v 


— 

y 


w 


c 


>— 

ft 

b 

1 


u 

2 U 

c ► 
y c 

_J 


-o 

<y 


w a 

g «£ 3 

05 C 
* 


3 

r 

r c. 

«-* 

C 7 

W 

C 

c 

c 

X G 

u 

£ 


— 


•H 

b 

Ui 

li. 

mJ 

2 — 

OQ 

cc 

«< 


H 

•J 

< 

CJ _ 

ftaia 

o 5 

£ 

p CC 

c 

2 •*-> 


B3 y 


>C 

ft 

a 

o s 

U- o 

2 G 


U 

u 
i —• 

c c. 


G 



•T 

/• 


CL 

*3 

CO 

_iu 


Z 

O 


i 


IT* 

ft* 

ft 

a 

ft 

* ft 

ft. 

0 «L 

ft 

ft 

«L 

tL 

c 

0 ft. 


^ c 

ft c 

y 

c. 

y 1 

CC 

• 

• • 

• « 

• 

«> • 

• 

• • • -M 

« 

• 

• 

• 

ft 

• • 

• • 


• 

ft 

ft 

• 

ft/ 


ft* 

ft 

ft 

ft 

ft 

ft ft 

ft 

«\ 1 

ft 

ft 

c 

ft 


ft 

ft. 

* r 


c 

ft 


y; 





1 





1 


• 

8 


1 




ft 1 






















*1 



i! 



ft 

ft 

c 

0 

ft ft 

o 

ft e 

r 

c 


«L 

if 

- y 

ft O 

r 

c> 

c 

y 

fV 

c 

3 

ft 




















ft 

ft* 


lO 

ft 

3 ft 

ft 

ft 

o 

ft 

ft 

ft 


ft- ft- 

ft 

y 3 


r- 

r. 

«« 

o 










i 


ft* 

8 






y 















1 







i 



»• 



ur 

w 

_ 

3 

Cw ^ 

tf 

C ft 

ft 

it 

c 

ft 


ft <c 

3 


ft e 

r. 

c 

c 

y 

< 

• 

• 

• 

• 

• • 

• 

• • 

• 

• 

• 

• 

• 

• • 

• 

• • 

ft 

ft 

ft 

ft 

ft 

ft 

ft- 

• 

CN 

ft- 

i 

- i 

p 

K ft 

¥ 

( 

y 

c 

ft 

r ft 

ft 

ft- 

1 

r, 

ft 

ft 

a 

«F» 



» 

1 


t 

1 

1 8 

ft- 


ft* 

1 

i 

• 1 

1 

i ) 


r 

» 


ft 










i 


i 







t 



•H 


CV 

ft 

C 

ft* 

ft» 

c c 

e 

•- c 

u- 

c 

c 

ft- 

c 

c c 

3 

ft t 

c 


•** 

o 

y 

0 

ft 








i 


1 

I 






i 


ft 

i 


























• 


ft- 

y 

c 


•* 

c 

c 

c 

ft- 

c 

c 

c 

c 

•- 

c 

c c 

c 

PV 

C 

c. -- 

X 

y 

X 

ft- 


ft* 










I 


l 

• 





ft— 

1 

ft* 

y 

8 

•— 


c 

ft- 

c 

C 

C 

c 

c 

c 

ft- 

c 

o 

c 

ft- 

3 


c c 


c 

<v 

c — 

3 

3 

a 

y 



8 

1 

i 

i 

8 

1 

1 

1 

1 

8 

1 

8 

1 

i 

1 1 

i 

I 

8 

1 8 

cv 

8 


r 




o 






















• 



ft 

o 

ft* 


c 

c 

c. 

ft- 

c 

cv 

c 

c. 

ft* 

•— 

c, c 

X 

<v 

C 

•* c 

a 

r 

c\ 

3 


c 

1 

* 

8 

i 

3 

8 

8 

1 

1 

1 

8 

8 

8 

8 

.8.8 

8 

8 

1 

* 

cv 

1 


i* 




c 

ft ft 

c 


C 


C 

IT 

y 

y 

3 


tt 

f J C 

r- 

r 

c 

y c. 

r- 

c 


c 

CV 

(X 

C 


3 

K 




ft* 


r 



-ft 


ft— 

c 

3 

0 

X 

c. 

y 

K 

a 

• 


ft- 















cv 


ft* 

ft- 

c 

r- 


c 

K 





















ft— 

r 





ft 

ft y 

f" 

ft* 

c 

cc 

C. U~ 

8^ 

y. 

3 

Cu C 

pm e 

fT. 

y 

3 

X <VI 

y 

y 

cv 

in 

cv 

r- 

p*- 


5 

r' 


ft- 


<\ 







ft- 

ft* 

3 

C 

X 

y. 

X 


a 

• 


ft- 















fV, 


fv 

ft- 

o 

y 


G 























c\ 


ft- 



o 

o 

e 

c 

C 

c 

o 

c 

o 

o 

C 

o 

O 

c 

C O 

ft- 

o 

ft* 

o c 

m 

c 

y 

• 

o 


c 











i 










8 

8 




ft* 

(\* 

y 

r- 


c 

<1 

e 

y 

o 

y 

3 

cr 

C 

C 

c 

y 

3 

y. csi 

c . 

cr 

o 

cc 


r> 

H 



y 


ft* 


CNj 


r- 



»r 


ft* 

ft- 

3 

O 

X 

3 

0 

y. 

O' 

• 

















r\ 


<v 

ft* 

C 

y 


C 

cv 





















ft- 

cv 


ft* 




rv. 

#r 

c 


c 

cr 

a 

y 

0 

y 

3 

a 

X 

<\i a 

»-» IT. 

y 

y cv 

y 

c 

cv 

y 

c 

3 

ftH 



K~ 


ft* 


ft* 


o 



K) 

yj 

ft* 

ft* 

3 

o 

X 

y 

o 

y 

cr 

• 


9 * 















(V 


<\ 

ft* 

c 

* 


w 

»r 





















ft* 

cv 


ft* 




c- 

ft** 

O 

c. 

o 

c 

O C .i 

ft* 

o o 

•-ft 

o 

O O 

*n 

ft* 

3 

o o 

cv 

ft* 

cv 

o 


o 




















ft* 

1 

ft* 

8 




cv 

<\ - K* 

ft 


C' 

c 

c 

y 

C 

y. 

IT 


c: 

3 

y y 

c 

y cv 

K 

y 


G 

X 

ft< 



j- 

•o 


ft* 


ro 


0 



■c 

y> 

ft* 

ft* 

3 

O 

o 


“5 

\j 

O 

• 

r -4 















r. 


cm 

ft- 

c 

cc 


ft* 

cv 





















ft* 

cv 


ft* 



ft-* 

ft 

■o 

D 

ft< 

o 

■£) 

J' 

lT: 

(0 

y 

•o 


r- 

y 

o y. 


X CVj 

ft* 

X 

ft* 

CD 

y 

yl 

«Bft 


=f 

y 


ft* 


ft- 


X 



m 

»o 

ft* 

ft* 

3 

G 

X 

y 

c 

=r 

G 

• 


ft^l 















cvj 


-v; 

—4 

o 

33 


ft* 

y 





















ft* 

CVJ 


ft* 







UJ 

-J 






X 

y 





>aJ 


• 

y 








O 

ft* 

u 

o 




ft* 

b* 

y 




y 



Z 


y 


UI 




a 

►- 

X 

z 




—s 

X 

UJ 




< 



u 


Z 

Ui 

y 




a 

X 

— 

N 



VT 

s 

D 

y 

y 



y 



X 


Ui 

G 

n 




y 

Ui 

y 

X 



Ui 

u 

y 

—V 

z 



y 


y l 

> 


X 

X 

X 




Z ► J 

r- 


y 



-J 


G 

5 

o 



Ui 


> y 

o 


y 

5 



L*J 


C O _i 


Z 




u 

X 

< 

X 

ft* 





Q u 

_) 


O 

u 

y 


% *b» 


- ~ - 

C 

a 




M 

X 

U 

X 

ft- 



« 


O G 

a 


G 


Z 




r- r. * 

OJ 


X 

y 

>* 

m 

1 

"" 

X 

«* 

y 


X 


X 

X 

Z 

a 

X 

OJ 


►— 


u c. 

k- 

iT 

3 

_j 

T 

u 

a 

z 

< 

G U 


8 

y 

Z o 

Ui 

o 

X 

o 

X 

>- 



t> a: iu 

*J 

i 

a 

<r 

UJ 

> 


< 

< 

ft* 

ft* 


y ui 

«t u 


•y 

G 

CO 

y 



o 

x a -j 

U 

X 

8 

o 

2 


Z 

X 

1 

■* 

K- 


z 

G 

ft* 

G 

y 

| 

< 

o 

*- 

u 

-ft 

ft» 

►— •■* 


Ui 

y 

*-* 

ft* 

X 

y 


y 

5 

•* 

k 1 

y 


-J c 

< 

«r 


G 

G 

-n 

ft* 

ft* 

y o y 

cr 

CC. 

Z 

X 

I 

o 

i 

G 

z 

X 

-i 

A 

8 

> 

—• ai 

y 

-1 



X 

3? 

X 

—• 

Z O x 

3D 

X 


u 

u y 

X 

y 

<c 

X 

-* 

< 

Z 

X 

> X 

o 

D 

• 

• 

T 

C 

& 

ft* 

OO^I 

< 

-ft 

X 

r 

< 

o 



X 

o 

ft- 

a 

ft* 

UJ 

« X 

y 

a 

> 

> 

UJ 

•» 

< 

I 

J X y 


-J 

X O 

t 

X 

<r 

X 

y 

G O 

y. 

u. 

y 

u * 


o 

cv 

> 1 

»«• 

< > 

Z 

-* 


245 















INDIANA TABLE 15 (continued) 


ACDA/E-156 




cv 

a 

¥ ■ 

¥ 

¥. 

r- ¥. 

c 

a cv, 

cv tn 

CV 

*Ci C ¥. 

— 0 

a 

CV «c 

cv 

¥. 

CV 

3 

34 

¥■ 

• 

• 

• 

• 

• • 

• • 

• 

« m • 

* • • 

• 

«• • • 

• • 

- • 

• •> 

■ • 

O 

* 

• 

a IT a 


CV 


e 

cv. 

¥ 

a cv 

cv. 

3 

r c 

CV 


CV ¥ 

¥ 

c. 

1 

1 

c 

1 

1 










cv 

t 

I 



cv 





V *lf 









• 

• 





1 



1 


* • 

C 

\r t_ 


a 

a 

0 

c 

¥ 

c c 

3 

c p- 

«t 3 

c 

If »-'lf 

vC O 

a 

1 

r c 



0 

<2 

u ^ 



















• 

O u c 


(V 


cv 

cv 

3 

i£M f 

MCO 

¥. 

■",3 

CV 3 

3 

3 

1 

» 

cv; 

1 

7 C-I 




1 





** 

¥ 

• 1 




•Ti 





U cv 









1 

1 





1 



1 


a ►- ~ 

3 r 
u u 
u <_ — 

f* 

u 

< 

- 

3 - 

r 

If 3 

0 


if r 

CV 

1 

C C 3 

r — 

- 

cv c ! 

3 

C 

i 

cv, 

cv 

- e r- 


t 

cv 

•• 

1 


1 CV 

cv 

CV CV 

¥ 

t 

r r cv 


3 - 

1 p 

3 

1 

fT 

1 

c u. 1 



l 

1 


1 

< 

t 

1 cv 

1 3 

1 

S i 1 

l 1 

1 

• r . 

1 


¥ 


c. — 









1 

• 


• 



l 



mA 



l 


If 


CV 


c 


«3 

c 



3-4 

C 

cv 

cv <t 

IT 

c 

c 

c 

r 

»»• 

cv 

3 - 


if 

sC 

>c 

a 

u 

c 

4 - 












1 

• 






3 “ 


1 ' 

1 


1 

1 

c 

1 











1 











1 


1 

1 


2 

IT 










1 

















UJ 

W 



























0 




























L. 




























u. 

34 

•— 

cv 

c 

¥ 

3 » 

c 

•» 



c 

¥■ 

cv 

3 “ 

r- 

c 

c 

c 

a 


vC 

•« 

3 1 

r- 

CV 

a 

3 - 

u 

<r 

< 3 * 










CV 



1 






r* 


1 

1 

cv 

t 

3 - 

►— 

1 











1 


1 











1 


1 

c. 





























v* 



























h- 




























If 




























c 

3 - 

c 

c 

c 

3 - 

c 

c 

c 


3 - 



«» 

CV 



•3 

c 

if 

3 - 

3 

3 - 

3 i 

u 

c\ 

a 

K 



«3 

1 

1 

1 

1 

1 

1 

1 

1 

1 

* 

1 


•» 

1 

1 

1 

1 

1 

1 

1 

1 1 

a 

i 

1 - 

1 

u 

1 











1 


• 

1 









1 





U 
2 U 
C 3 
- C 


—< c: cv c cv •- if cv — a cv •- c c 3 ¥.—■ c. u 

1 • t 1 1 1 • i 1 t 1 1 1 • 1 1 ~ 1 — 1 u 

• 1 1 


o 

w 


ui -J 

»-• 
h a. 
w c 

a * » 

§ »C 
u r u 
0 

¥ 

I a 

C 3 F 

— c 

7 (J 
2" 


2 - 
C C 


w x a 

§ • c. 

f** 

X 

n 

o x 

u. C 
2 U 
2 
3 


u 
u 
z — 

c c. 



C 


3 

K-. 

r>j t 

-3 

If Ol 

C 7 

C N 


a 0 c. 

^ u" 

3 ^ fO 

¥) 

r- 

X 

CO 

cv 

cr 

if 


<r 

K 

3- 

< 

r f\ 

r- 

V ¥ 


x — - 

3 a — 

a — 

X 

c 

X 

cv 

• 









3^ 


cv 


»C K 

cv 

c 

3 » 


0 

¥ 
















X 


cv 



O 


3 

CV If 

»C N O 

<r 

¥ lC 

3 i 

0 0 3 

IO CC 3 

CV IT 

3 


X 

3 

fT 

r- 



a 


3 - 


¥ CV 

r- 

X ¥. 

X 

3^ 3^ 

if a: cv 

3 — 

c 

c 


3 - 

• 









3^ 


Cv 


r »r 

CV 

0 

3“ 


O 
















cv 

X 


<\ 



c 

O 

c 

c 

0 c 

O 

c 0 

3* 

O O 

•H 

coo 

3-» C 3-« 

O 34 

X 

O 

X 

O 


Nf 















1 

1 

1 



c 


X 


CV if 

if 

X o- 

<v cv 0 

« 

3 0 3 

— i r- 

cv 0 

3 

34 

O' 

3 

0 

IT 

vO 


c 

«o 

34 

KT 

■0 <V f 

X <V ¥) 

vO 3^ 0-» 

x ® cv 

ec -4 

3 

O 

X 

34 

• 









3- 


cv 


fC. 3 

CV 

0 

c. 


c 

cv 
















X 


cv 



C 


X 


cv .r 

if 

x a 

CV 

CV « 

3 

ff O « 

O 3 X 

— c 

CV 

X 

X 

X 

C\J 

3 

X 


* 


3< 

¥) 

(O <V 

X) X cv m 

C 3-1 3^ 

X *0 cv 

<c — 

0 

0 

X 

3-* 

3 









•— 


cv 


fO »r. 

cv 

0 

0 


c 

■r 















3-4 

X 


cv 



3^ 

O 


O 

O C 

3^ 

3 - O 

cv 

3-4 O 

cv 

1 . 
0 . 
0 . 

4 . 

2 . 

6 . 

0 0 

K5 

3 


• 

* 


O 














CV 

3*4 

<v 

1 



J 

M 

3 • O 

co o 

-f. 

¥ 

X 

% 2 
O O 
_) O 

z 


f— 

c- r- 


C\. \T if 

r- 3 



X 


*x a ac 


a 

0 

cv a 


X 



0 

0 

X 

•n 

H "O 

•0 V 

3 

D 

V 

•0 

i) H H 

r) 


■0 

X 


® 

X 

34 

• 









(V 


ir 



cv 

O' 

0 


0 

Co 















—1 

X 


CO 



o f- 


nj X flit r. 

*■* lO m cv .» vC CV <1 v£ —< —< ^ CC OJ 
3 Vl -O <0 


O' 

lO 

0 

3 ' 

X 

cv 

3 

CV 

0 

3 

3 ^ 

• 

<V 

0 

0 


O 

3 


34 

X 


CV 









Uj 
















3 

-J 




X 

X 











O 

34 

'aJ 

O 


t —1 

w 

X 


►- 








a 

K 

oc 

2 



a 

u 


< 








a 

X 


34 

X 



X X 


K 







X 


UJ 

I- 

r 

3 

u 

*- 

r z 


IT. 


3 




Z 

3 

_j 

►- 

•—> 

X 

-1 


0 

0 0 


UJ 


> X 


Ui 


C 

u 



z 


0 

a 

< 

T —’ 




0 3 


X 


34 

-3 

— 

*2 

fX 

_J 

34 

ac 

u 

U 3 


• 


O O 


n 


►“ 


z 

jj 

_ 

r x >- 

4 > 

1 

* 

X < J~ 


X 


X 


H* 


U 

6 


H* 

u. 

O -J <x 

3 a 

z 

4 0 3 


• 

X 

z o, 

>- 




r 

UJ 

< 

1 

a < u 

> 

34 

4 

V —• «H 


X 3 

« u. 

X 


c 

3 : 

X 

_i 


X 

» u ? 


X 

s: 

1 Z 3 


z 

O 

34 

•» 

U 

-» 

►- 


34 

34 

1.1 

3 ^ 

cr 

X 


X 2 — 

3 


3-4 

-J O 

on 

►—< 

34 

wO 

d 

►— 

a: 

X 

Z X X 

0 

1 

0 

Z T _l Q 

• 

> 

34 y 


Z 

3 

—i 

X 

CD 

X 

— 3 0 

*- 

X 

X 

« X « 

< 

z cr 

> X 

.J 


—- 

O 

0 

UJ 

< 

3 a t <* 

:> 

•~. 

34 

X 0 3 

ac 

34 

Uj 

3 ai 

■* 

< 

2 

u> 

'X. 

— 

-L 

jaui 

X 

< 

JC 

— oi ^ 

3 

u. 

oA 

0 «t 


I 



246 


OUEMPLOYMtWT HATE 



















ACDA/E-156 


4 If « 

I 

V • If 

*e'- 

V c 

u ~- 
ou «t 
2 Ct 
a <\ 
a. *- —t 

a 2 ‘ 

a a • 

u. o 

►Of', 

c u. i 

a — 


If. 

It 

C 

2 

If 

C 

u 

a 

u 


ff 

I 

If 


ec 

i 

c. 



r. 

C 

f 

9 .*. 

if 0 

AO X* 

o 

r. 

1 ^ 

6 

0 

IO 

•* CL CV vtl 

o 

0 

te 

• 

• 

• • 

' « • 


♦ » 

• 

• 

• M 

- » • 

• • • 


• 

• 


A 


CV 1 CV. 

i»- r 

tv CV 

< r 

c 



^ cv 

3 r.' 

c 

CM 

tl 






1 

i 

3 

1 




A 

i 









1 





1 




O 

if 

C O 

3 o 

a a oi 
• • « 

i" tr 

3 


if a- 

X X 

cv a r 

I 

c. 

3 

X 

3 

• 

* 

• • 

• • 

• » 

• 

• 

• • 

• • 

• • 9 


• 

• 


(V 

t 

<r cv 

3 3 

cv tr- 

« CV 


cv 


^ cv 

IT ^ 

i- 


r— 







• 

If 

l 




r 

1 

rl 




1 




1 





*, 




3 

a 

c r 

C CV 

h •" 

C X 


cv 

« « 

3 CV 

C C|»> 

cl 

0 

c 

f*’ 

• 

• 

« • 

« • 

• • 1 

• • 

• 

• 

• % 

• • 

• » • 

m 

• 

• 

r- 

i 

3 

-i * 

•"» t 

p c cv 

p. 1 

p 

X 

<v 

C r- 

1 •- 1 

r-, 

a 




i 

l 1 

1 

l l I 

«» 

tr 

1 

1 I 

1 1 

1 


» 

1 







1 

i 





» 















» 

• 

• 

A 

9 + 

C 

•- c 

c c 

ce c 

(V c 


•» 

c c. 

C 3 

P. X c 


c 

C 







1 


1 




•=* 

1 

X 


<v 


Oi 

a 

I 


cv 

a 


c 

I 


c — cc— CPH-ccvcir—ecc3«vo.cir cv p- c 
t. I •" I A. | 

I III 


1 / 

a 


—• c 

p — 

l 


Ca-CCCCCCC 

I I I I I I I I I 


k c c cv - c c a c ft c r r- cv. <v 

l l - » i I i l i i i *-• a <\ tr 

l ill 


•o 

4 > 

3 

C 


C 

o 

o 


w 

a 

03 

2 


u 

2 U 
C <- 
C 
a 

ui _• 

h- 

W 

3 • C 

(tl ^ (j 

c 

If 

z a 
e 3 
•- c 

I u 
2 


U. 

a * 


2 — 
c c 


»• C. *• C C C C»-C»-Cr-a-»-cc 3 AA C.C 

I i • I I I I I I I I I I I I I I I I I 


<V 

<v 

I 


fg 


f- ® o 3 ^ c K-if a o f'C^-ro*icr-f-o<vgf^ 

3 •- t* - h- a- — O SfjaaiK'.irij 


CV 

0 

a 


3 

3 

r 

<\ 


(tACJHHKiieOAHHJnOAffflON m 
3 «- 3 »- •- — IO 3 If J—i—.,£f*'vC%£3 *- 


Cv. 

3 

P 

<V 


ooc-eoccocooooooooo^co cm 


*( • 
t r ~ 

<v 


o 

3 


-a CVJ 

I I 


a 

c 

a 


3 

3 


p~ sc a 

- o 

X -< 


If 

H *“ 



p- 

« c 

s a 

X X if) 

sC 

IT 

if 

cr 

O' 


< 

w ca a 

tf*) 

^ C^ 3-C 


cm »r 

•«» 

X K> ® 

sD fO 

X 

OJ 

KV 

O' 

• 

If 







•• 0"t 

3^ 

X 

#o 

, 

X 

3 

2 

« x c 









cv 





« 

y 


•V w . 

<£ 


a 


X 

X O 


a- a- iO X X PP 

X 

c 

3 

C-3 © 

X 

X X 

IT X- 

3^ 

X- 


o 

X 

s 

3 

3 

3 

34 

^ <NJ 

cv 

fO 

3 

•■4 1 3H 

X 

to X 

X to 

X 

PM 

•y 

O' 

• 

OI 










3-t 


3— 

X 

to 


X 


u 














cv 




2 


















•J 































• 

• 

• 

• 


*JL 


O 

O O 

Cc 

o O O O O O O 

o 

o 

o 

o o 

CM 

-♦ m 

© Ot 

O' 

to 

O' 

3-t 


a 

O 













1 

» 

1 





, X £ O II a - lO VC « ht , '3Cl)aOAf'Al r . 1C a 

Sza -X 3 M 3 - - -< X MiO JHHJJIOO ^ 


r- a x 3 

H fO ^ » 

^ i X 3 

* . 


®Xt>3^*aaK)>C«s0C'3Om^O , il«3K»<2j ® 

** 3 W3 M h» »a CV <VK>3«^a-<vOlO'£ -£ PTi h» 

I I —t H H I «0 


o 

PM 

■O 

Pj 


(2 

3! 


O' 

O' 

CO 


3 







Q 

a 

_> 




X 

If 

I 


a 


i 

*- 










O 


Ul O 



►a 

at 

If 


V— 



2 


i- 


a 






X 

1- 

« Z 

1 



a 

a 1 


4 



a 


2 

a 

K 






a 

>t 

“ aa 

I 


l/l c 


if if 


»~ 



» 


V 

o 

4 





Jh 


ai 

t- X 

1 


u a 


5o 


If 


t- 

V 


¥ 

X 




Z 

t- 


►* 

►t i/I 



a 

u 


a 


> if 

o 


>- 

O 



u. 


O 

u 



2 - 



U X 

< 

x *->. 




Q a 

Sl 


O 

a 

1- 




M 

2» 


o 

X -J 



« X 

a 

a po 

X <t If 


• 


i5 u, 


—i 


2 




1— 

2 

£ 

aJ 

3 X 

KT 

>■ 

X 1 

3 


X 


a. 

X 

2 

C- 

X 

a 


►— 


u 

o 

t~ 

•a 3 -) 

x a a 

Z 

< o a 


i 

v/> 

z o 

a 

O 

£ 

o 

X 

>• 

J 



X 

U) 

< 

i a 

< 

UJ 

> -a 

< 

C M HI 


if a 

4 a. 


Ha 

UJ 

5 

>- 

or 


© X 

a 

-1 

u 

X 1 

o 

2 

I 

X 

1 Z t- 


z u 

*a t 

a 


z 

o 

►- 

o 

2 

1— 


o* 

pa 

U t- 

•^1 


X O' 


If 3; Ha 


f*4 

»-4 

a o, 

4 

4 


a 

a 



•3* 

l/> 

o 

r- 

X 

X z 

X, 

Z O 1 

u 

Z I'J 

1 

> 

►a a 

»~ 

a 



a 

2 X 

2 

2 

o 

X 

CD 

X ~ 

ai 

upii 

if 

4 X *■» 

4 

Z X 

> Si 

O' 

o 


• 

X 

Zj 

o 

M 

o 

o 

LJ 

4 

3 X 

r 

<X O f" 

►a 

X O t- 

X 


a 

Ha fV! 

i- 

a 

> 

> 

a 


X 

£ 

J 

a 


a 

J X O 

X 

X -c 

X 

r- a 3 

H- 

Oh 

if 

u<; 


o 

a 

u* 

a 

5 


247 

















KENTUCKY TABLE 15 (continued) 


ACDA/E-156 


< 

•r s 


t 

1/* 

•if 

< 

c **' 

\r v. 

U 


OU.CC 

2 

CM 

u 

A 

a 

— 

U. 2 

b. 

li. 

U. 

V — 

h 

a r 

C 

u. i 
a ~ 


w 

IT. 

00 

U 

a 

l 

1 

2 

if 

it¬ 

00 

er 


U- 


u 

0- 

u 

«r 

a 

i 

c. 

tv 


w 

A 


u 


a 

0* 

*— 

f- 

u 

1 


u 
2 U 
c A 
a c 

_J 


£ ^ 5 

Liou 
« o 
** 

x a 

C 2 

«- c 
x u 
2 


U. 

u 

2 a 

c c 


H *- 
WCL 0. 

CP ♦<-> 
A 
X 

* 

a 
c x 
u. c 
? o 
2 
3 


u. 

X A 

cc 


w 3 a 
* c 


:« x 
~ o 

_l u 
2 



A 

a a' 

»■» 

3 if. r. 

a cl c, 

-c r. 

— X 

c 

IT 

C 3 A 

A X 

G 

A 


A 


if 

• 

• » 

' • 

• • • • 

• • • 

• • 

» O 

•I 

• • 

• • • 

• •> 

• 

* • 


• 



A 

A 

l\ 

r 3 c\ 

A C 

A 3 




a r r 

0 


•» 

C 









«^r 

1 

• 



A 











, ' 

• 


1 



1 



• ; 


• 


c 

X C 

f 

tv a o 

3 0 K 

- 0 

If If 


X 

If C A 

r C 

C 

A 

c. 

0 


a 













t 

d 

• 


W— 

a 

|f 

t\ 

3 If A 

IT <V 

K 3 




A X 3 

A 

i 









cr-« 

w~ 

1 




r 



•-> 








t 

1 





• 



i 




3 

a o 

a 

C •- If 

4. C . A 

c a 

c o 

a 


■H a C 

H- C 

X 


a' 

c 


r 


















• 

n i 

i 

- 1 A 

A A X 

e c 

If A 

c 

€V 

- 1 • 

1 A 

r 

• 






1 


1 1 

1 1 - 

1 A 

1 1 

1 

i 

i 

0 

i 


c 








1 

1 





1 



^4 



A 

a 

c - 


6. A. c 

C C tf 

c ^ 

— c 

c 

c 

3 A A 

C A 

c 

A 

3 

3 






1 

1 

1 




1 


i 

1; 




<\ 

c tv 


c cv c 

— c c 

c — 

•- c 

c 

c 

X A 0 

3 X 

c 

ff 

X 

C 







1 

1 

1 




1 

• 

1 

1 



c 

c 

c c 

c 

C C C 

c c c 

c •- 

r — 

c 

c 

A C A 

C X 

0 

•• 

X 

A 


*» 

• 

i i 

1 

1 1 1 

1 1 - 

1 1 

I t 

1 

» 

t 1 1 

1 H 


7 


•- 







1 






• 1 

» 






A 

G — 


C ^ t* 

— c. A 

c c 

fs. 

c 

c 

x a a 

-« G 

tc 


A 

X 


c 

1 

i • 

9 

1 1 1 

1 1 1 

1 1 

1 1 

. • 

I 

• 1 i 

1 

A 

1 

00 

r 




>D 

3 A 

IT 

WA i 

vf Ah 

a A 

IA If 


mH 

X C A 

*r K 

A 

X 

0 

c 

if 

a 

* 

- IT 

c\ 

K — 

- — r- 

0 — 

lC ^ 

*- 


C 3 C 

A X 

V 

3 

K 

G 

• 











•— •— 


00 

A 


«- 

K 

































4 



a 

3 3 

IT 

A 3 A 

v£ r- io 

— A 

3 X A) AJ 

C A C 

»o »r 

c 

X. 

X 

3 

X 

a 

U. 

— kr 

<\ 

r - 

n e-4 f*» 

0 - 

^ a 

•- 

0 — 

C 3 C 

A X 


A 


G 

• 











C Cv 



<\ 


0*0 















0 





c 

o c 

C 

C G © 

COG 

G G 

c o 

o 

c 

O C —i 

o o 

ff 

0 

•—4 

A 


«r 














l 




a 

3 3 

ir 

AJh 

l 

X a X 

•“ w 

tv If 

tv 

tv 

O' a a 

K*i «-• 

A 

3 

X. 

A 


If 


— if 

a 


^4 ^4 


X 3 



3 3 3 

A 3 


A 

o 


• 











•- 

*-• 


A 



K*. 














0 . 





a 

^ tr. 

if. 

A 3 A 

iN if 

Hi X 

tV If 

•— 


X Hi CC 

n 0 * 

3 

X 

X 

X 

A 

3 

<c 

—• x 

<M 

fO 00 

04 *-4 s£5 



•H 

Hi fj' 3 O' 

C- if 

o 

A 

If 


• 












0 "* 


A 


04 















IT 


04 



•■4 

o 

o 

O A O 

O © —• 

o o 

o o 

o 

Cj 

M H (O 

O G 

04 


X 

K'. 


if 











I 

04 


• 




- 

3 3 

X 

A 3 A 

thr. 


A X 

tv 

<\ 

C A — 

*0 rr 

A 

a 

a 

3 

c 

“\i 


«-« J". 

A) 

•O H 

*4 04 D 


0 3 

H 

-H 

0 3 0 

A O 

-< 

A 

f 

«~4 

• 











A A 

•—» 


A 


00 

0 
















00 



a 

3 

f. 

>v 3 a 

£A K| 

^ >0 

^ (T 

r-e 


N H CC 

if ® 


04 

(VJ 

X 

a 

** 

X 

•H X) 

<V 

fn *4 

H *M \^| 


•<£> ^ 

0 

04 

3 3 3 

A if. 

o 

A 



• 











•H «-4 

^4 

^4 

A 


H 








n 

UJ 

J 



a. 

X 




oJ 



H- 









o 

*-< 

w 

d> 

Hi 

U X 




*- 



2 


A 







a 


« 

z 


X UJ 




< 



UJ 


2 

Uj 






Q. 

X 

-h' 

Hi 

X c 

2/ X 

X 



►— 





Ui 

u> 





X 


IU 

►— 

X 

UJ UJ 

A x> 

z 





A 

V 


y 

X 




z 

A 

_l 

►— 


X 

-I 

u o 

o 



UJ 


> X 

o 


V 

o 


u_ 


o 

u 

_l 


z 

Hi 

O X 

< X 

Hi 





O Ui 



o 

Ui 


T 



X 

H 

iD 

3 

-J 

— X 

u. UJ 

A 



• 


o o 

a 


_J 



— 


►- 


1 

a. 

2 

X X A 

Z 1 

x x 

<c 

v/ 


X 


X 

X 

4 

c. 

a 


K- 


u 

o 


v- 

U. 

D J Ct 

uj a 

z < 

u 

UJ 


1 

X 

z o 

UJ 

O 

z 

o 

V 

-J 



(T 

UJ 

< 

1 

a < uj 

> Hi 

< * 

Hi 

fc-4 


X Uj < u. 

A 

u 

<D 

-r 


O JC 

a 


u 

X 

1 uz 

X 

X i 

z 

h 


z 

<_> 

*** 

G 

A 

2 

< 

A 

u 


►— 


*— • 

P-0 

IX 

A —| Mi 

X X 

X 


*■« 

UJ 

04 

Hi 

-J o 

< 

4 



X 



(/» 

c 

h- 

X 

Xl 

ZII 

O 1 

U Z 

z 

-1 o 

1 

> 

►-4 

H* 

_J 



o 

X 

z 

4_ 

o 

K 

s 

z 

Hi uj (J 

a cr 

X < 

z 


< 

Z 

K 

> z 

o 


• 

• 

c 


Hi 

3 

o u. 

< 

D 

X X 4 

O Hi 

A X 

O A 

a: 

*■4 

UJ 

Hi X 

h- 

a 

> 

> 

-0 

<x 

1 

O 

ti. 

r-* 

_L 

_) 

X u * 

X < 

X A 

H> 

D 


a 

X 

■_» X 


o 


*4 

00 


















a 

u 

u 


248 


UNEMPLOYMENT RATE 
















LOUISIANA TABLE 15 (continued) 


ACDA/E-156 


m nr a 
l 

ir 

< _ — 
c 
V c 
u «- 
c u «r 
zr » 

u O. 
ft ft ~ 

u r 
u u 
u g — 
► o ft 
C U I 
Q. *- 


IT 

•-* 

ft. ft. 

99 

o 

c. 

ft 



a ft 

IT 

0 

•£ C. 

V, 

c «t 

a 

ft 

£ 

0 


4T 

• 

• » 

• 

« 

• 

» 

‘ • 

• • 

• 

• 

• 

•< 

• 

9 

- • 

C 

¥ 

• 




ft. 

ft 

ft. 

ft 

ft 

r. 

<v 


<3* «- 

ft 

1 


■ 


ft r 

r 


0 



ft 










s 

9- 



j 





ft 














8 








i 



i 


f" 

¥ er 

ft 

ft 

c 

c 

r 

o 

If c 

V 

r 

IT 

ft 

u 

If tf 

ft 

C 

C 

— 

Of 

tf 


CM 

• ft. 

ft 

K* 

*r 

rr 

r- 


IT ft 

£ 

_ 




ft 3 

a 


ft- 

«ft* 


ir 










1 

99 

i 







IT 



9- 











1 








1 



1 

♦ 


a 

ft 0 

ft 

0 

ft" 

ft- 

IT 

r 

C a 

IT 

»C 

ft 

£ 


ft a 

c 

9" 

c : 

ft 

o 


V 



















* 

• 



i 

ft s 

i 

1 

s 

<\ 

c\ 

ft 

ft 1 

99 

3 

ft 

Cm 

c\ 

- i 

i 

1 

ft- 

<\ 




1 




i 

1 

i 

1 

ft 

• 

1 

# 

1 

i 



¥ 

1 


ft 


1/ 

U 

c 
X 
U J 

a 

u 

u 

u 


- c\ 

ff — 

I 

IT 


Ul 

3 


Ul 

g *C 

b • g 

33 f-, 

>£ 

V 


«~c<\.-oe:cccc\c.- — ece.ircvcc.’i 

ill i 


tr 

cv 


>£ 

I 



9- 

«»* 

c 

ft 


c 

»- 

c 

C 

c 

(V c 

ft 

•- 

c c 

cr 

£ 

V 


C 

X 

c 

«c 

a 

tc 



i 








1 


1 

i 






1 

•- 

ft- 

1 


ft 













































I 




• 


c 

c 

ft 


c 

r 

c 

c 

c 

c 

K 

c 

ff 

K 

C\ c 

c 

t* 

9- 

fV c 

a 

0 

X 

a 

\£ 



i 

1 

i 

» 

i 

1 

) 

I 

1 

1 

» 

1 

i 

f I 

• 

I 

1 

1 1 

• 


ff 

t* 


i 




















• 





























w . 
























• 

u 




CV 


a 

c 

•— 

c 

c 

*— 

c 

o 

Cv. 

— c 

c 

X ft- 

c —• 

G 

ft 


9- 

C 

i. u 

0 

i 

• 

i 

1 

i 

1 

1 

1 

1 

1 

1 

* 

i 

1 1 

1 

1 

1 

- 1 


¥ 

i 

¥ 

i 

c «- 
— c 



















e 


i 




-1 

























'ft 

























a. 


a 

c 

ft 

IT 

^■4 

99 

IT. 

— c 


r. 


X 

ft X 

£ 

r 

c 

x. a 


r 

9-+ 

ft 

cm 

> a 

a 

r 


4 

ft 


•— 

•— 

«- 

•- 

r 


»- 

t- 

X — 

99 

3 

£ 

X ft 

CY 

0 

e 

X' 

K* 

£ i 

















r. 


<\ <\ 


c\ 

0 


r 

•C 





















•*- 

rr 


9 - 

*“ G 

c 

























X 0. 


o 

ft iT 

X 


ft 

£ 

ft 

c 

ft 

ft 

4J* 

ft 

c a 

X 

c 

X 

X, X 

r- 


X 

X 

fO 

e a 


K 

tr 

c 

<\ 


•— 

9~ 

9~ 

ft 

>r. 



ft 

x — 

*— 

3 

X 

X ft 

ft 

ft 

c 

ft 


►- c 



















ft ft 


r 

c 



T l_> 






















K 




























- 

























Ul 


O 

O 

c 

c 

c 

o 

c 

c 

o 

O 

c 

c 

o 

o c 

C. 

9* 

o 

-« o 

o 

K“ 

fO 

fT 

o 

U. 

vt 











i 










i 

t 

1 

7 — 

c c 

























•— 

























-J 

























z: 


0 

c 


c 


cv 

r 

ft 

a 

X 

ft 

ft 


ft a 

X 

ft 

c 

a x 

G 

X. 

X 


X 

x a 

J- 

Pi 

X. 

X 

(M 



99 

♦—1 

9-4 

t<-, 


r-4 

ft 

f) 99 

99 

•3* 

X 

£ fO 

CM 

O 

ft) 

X 


s 

















ft 


ft ft 


rr. 

ff 


rr. 


<r 

!*• 


— r 


a 

a 

G 3 

vT — — X f\j a J" f\ <Y 3 

r- u >£ 

ft 

er 

K' IT 

C' 

<M 

X 

3 

kT 

o 

s 

3- »0 

X ® 

(\j H « H n fO 

tT. h fi 

3- 

X 

^ m 


O 

CM 

X 

3 

• 

c. 





ft 


rs. o. 


fT 

7 


IT. 

3 

G 









9 -1 

to 





z 


u 

u 

7 ft 

c c 


fO 


cft-toc co©c.c>oooft0.o*0ft.3oc:* 


CM 


a 

i 


a 

•-4 

i 


CM 

I 


ra —' 
t- i. a. 

U1 >- 

g -»c 

■3 

S3 C 
.T) 

31 > 
■J O 

-J G 

z 


c oj vC r- r. x o ircv— ^r-j-cocrvLira r~ 

<) iTD M —t -o ft ft- X ft ft 3 .0 .O ft O 

CM CM CM fO 


•o 

J 

IO 


o 

3 


ft- 

3 


*1 


7- J. 3 & ^ ft j x CM ft <o ft 3 u ; ic /u x o m 

f»- 3 CC, CM ft ft ft ft rf) ft ft- iT. ft. ft 3 >£ \C f*l ft O' J £ 

CM ft! ftj CM O 

I ft tO 


3 

"ft 


u 






.*-> 

-1 






X 



*U 



ft 








o 

M 

UJ 

o 




>aJ 

X 





z 


ft! 






ft 

K 

0 

z 



z. 

cr 

UJ 


< 



UJ 


Z 

UJ 





0. 

X 




X. 

o 

7 

X X 


h~ 



a 


Ul 

G 




X 


UJ 

ft 

X 


u. 

Ul 

ft 

X 2 


J*. 

ft 


)- 


X 

X 




^ t- 

_J 

>— 

> — . 

X 


G 


U 

o o 


UJ 

> 

X' 

o 


ft 

o 


u. 


O G> 

_) 


z 



G 

a 

< 

X - 



Q 

UJ 

-J 


OI 

u 


X 


M, __ 


o 

ac 

_J 



a 

u 

UJ ft 


• 


G 

a 


—1 





f- c 

X 



X 

X 

ft X 

i 

. 

i «* x 


2 


X, 

z 

z 

X 

X 


r- 


U O 


1- U. 

-j, 

a uj 

a 

z 

<CUUJ 


1 

X z 

o 

UJ 

a 

X 

o 

V 



2) ne 

UJ 

< 

i 

a 


UJ > 


«* 

S ft *-t 


X 

Ul « 

u 


ft 

UJ 

X) 

X 


o 

x a 

_) 

o 

X 

i 

G 

z 

X 

z 

1 Z ft 


z 

G ft 


G 

ft 

2 

« 

V- 

CJ 





UJ 


M 

-* a 

X 


X X>|ft 

UJ 

ft 

ft -J 

c 

< 

«r 


G 

v/1 

9* 


X c. 

»— 

X 

X 

z 

2 

X o 

1 

«J 

Z Z _J o 

1 

> ft 

Ul’ 

ft 

_J 



o 

X 

Z 2 O 

x X 

2 


ul 

U ft 

a 

X 

< S ft 

< 

Z 

a > 

X 

O 

o 

• 

• 


X 

♦— 

G O 

-J 

< 

O a 

X 

«t o 

>—» 


X O ft 

.7 


u -• 

X 

ft 

a 

> 

> 

-v 

< 

VL 

-> X 


•Jl 

-J X 

J 

X 1 

« 

z 

— Ul D 


LL 

X G 



o 

-4 

-4 

*—« 
















1 


a. 

o 

u 


249 


UUEMPLOYMI-NT RATE 
















MAPYLANO TA6LE 15 (continued) 


ACDA/E-156 


4 ir c 

v> «if 

U C ; 

¥*.? 

U A 
tt A- — 

uj r 
u u. 

U L <* 
► O A 
C U. I 

a — 


—i if 


o r.Ac<iric!<»roAeVi x * cm « 

vvAAr«AA C A A •- »*•►•»*» IT 


C AA f 

I tv • 

I 


®: 

cv* 

I 


X 

I 


a a a-, x ir - o r OjMf o if if a if 3 ir «rc' 

MoAAdCMlO CAIi*- — — CV 3 3 A 

•« a i r.. 

, ‘ » » , ; - • » 

* {(.AoAlfKAiiilCiflfCCAC A C 
• •••••••■•••••••••••a 

I - I | ^ f A A •> r I C fl AC A o I I It A’ 

I I I I I - 9 I I I I I 

| « • » 

• i i 


* 

I 


c 

■ 

t 


A *■ 

• • 

r i 

I 


e, 

t 


r 

* 

t 

»; 

i 

c 




ml 

as ml 

%*l 

/» 

# 













• 

A 

^CA^-0~C»-C A 

c c 

c\ c 

« C 

ir 

K c 

- x: 

A 

1r 

If 



1 

1 

1 


3— 

«*| 

1 

cv 







* 



r 

t 


9 

j 










• 

• 

• 

• 


— C * — c cv e — c c 

C A 

!\ C 

c c 

x 

3 K 

— c* 

c 

A 

X 

3 


1 

9» 

f 




cv 

99 

*<- 

1 




1 





1 

1 

1 




C 

c 

c —. c 

C 

c 

e 

c* 

— C 

K 

a 

c\ 

C 

c 

If V 

If. 


C 

r 

X 

a 

If 


i 

1 1 1 

1 

1 

i 

1 1 

- 1 

9— 

i 

i 

1 

1 

i 8 

1 

1 

A 

x 

1 

»f 

•— 








1 

8 








1 

i 


i 




1 

c cv — 

c. 


c 

— © 

cv c 


3 


c 

c 

X *f 



C 

a 

A 

a 

c 

e 

i 

8 8 8 

1 

1 

8 

8 1 

1 I 

1 

8 

. 8 

8 

. 1 

1 1 


1 


r. 

CV 

s 

«p* 















i 



i 






& 

lOfd PO 1 H C 94 0 

CM C If 

c 

a x cv if c 

X f. 

K» 

0 

3 

3 

CM 

« 

a. 

C f CV f A 3 


If 

- — x « a 
CM <v 

x a 
w. 

a 

< 

cv 

IN. 

3 

If 

a 

X 

• 

K- 


i 



o 

f f W fill 

i « •< Aie a «e 

x a « © f- cm 

94 

A 

X 

3 

3 

a- 

cv 

or: c 

X *» f . A (T »< * 3 < •" 

— «C « CT <A 

cv 

c 


X 

• 





cv a r. 

A 

cv 


X 




» 



99 

3 






O © © O © © 

O O C © C © 

© 

CCC— © — ©O- 

m 

•• 

K> 

•Pi 


X 





1 

1 




<A r* ir cv r. r 

*» h « A Art 

3 

©a x * c » a- x., 

X 

3 

0 

X 

O 

IT 

CM »«■) (XI H f) Al « H Kl 

3 

sCrtrtCOCClf 

1" 

O 

3 

A« 

• 





cv cm r. 

X 

CV 


X 

CV 






«*• 

3 


•-• 




<J 

«n r or. x — — — a w- c 

OAlfiSCitMf 

If 

if 

CM 

ce — 

3 

CM 

or#o f\j^Of\jco^K>^ 

i 

x — — x®eoxin 
, cv cv r 

A* 

X 

o 

CM 

3 

in 

^ • 
x «r 


o 

0. 

i. 

e. 

0. 

0. 

0. 

0. 

0. 

1. 

0. 

0. 

1. 

rt O O fi »C 3 HO 

3 

3 

X. 


r 


» 

* 

94 

1 

• 

• 



0 

r r. 

cm r X 

« »■ « w Aa 

•TON 

X 0 0 — A- •“ 

r 

A- 

«r 

a 

0 

V 


•?> 

•O VJ 

h n m ® — cm 

3 X — 

— x © > 3 n 

a 

3A 

3 

A 

• 






•-* 

cv cm p) 

X 

94 


X 

CM 

• 


• 






3 


94 



a 

y 

•O CV CM 

in 

^4 *H 94 

O r\, 30 

cm f o 

£«A*X- 

X 

CM 

3» 

X 

MU *■« CM 


o■ r 

CM 

HUN 

CO 94 fN/ 

3 X rtC rt< 

x cc © x >n 

M* 

o 

X 

A* 

© o 








•H 

CM CM if 

c 

CM 


X 

-J o 
—* 

a9 





■ 





94 

3 


rt 





U. 














3 _i 





■U 









O — 

UJ © 


*-• 

UJ If 

*- 

Z 


A- 






ns k- 

ar 2 


w 

a uj 

3 

UJ 


Z 

UJ 





a r 

_/ *H 


If. o 

3 If if 

A- 

X 


UJ 

o 





*1 

*- X 


UJ UJ 

►* 3 Z 

If A* 

► 


X 

X 




?v 

J H 

— C/I 


J 

O O o 

UJ > If 

o 


>• 

o 


i*i 


O y 

J 

2 - 


o a 

3 1 — 

O UJ 

_J 


o 

u. 


2 


•rtU j 

*- 3 X -J 


-* a 

U. UJ A- 

* IS (J. 



_J, 





>- c 

1- -X. 

3 cc -r 

> 

r i 

3 X < if 

x jt! 

X 

3» 

a- 

X 


X— 


!^; o 

*- 

U. 3 _> 0C UJ 0. 

Z 3 VJ UJ 

» if 2 O, 

UJ 

O 

X 

o 


v •*{ 


3 « 

Ul < 

i a < 

w 

> >-* 

3 M — — 

If UJ 3 U 


— 

UJ 1 

CO 


* z 

•3 x a 

_» o 

C 1 u 

2 

X 

X 1 2 »- 

2 0" 


A* 

2 

3 


A- U 

2 

w- 

rt Xrt 

UJ ►- — 

<—• 

a i/> 

if 3 - 

is " " j a 

3 

3 

3' 

_J 


l/» "• 

•—< 

i/J o 

A- X 

e z x 

X 

O 1 

OZXJ3 8 > — UJ 

►- 

_J 




3 Of 

•9 

z c 

X 3 

* *- UJ 

tjHir 

If 3 X — 

3 2 X > X 

o 

5 

• 

• 



*"4 

o © 

Ul 3 

3 £ X 

3 o •- 

— X O i- 

x — uj — a 

A- 

a 

> 

> 


2 3 


J H. 

►” u. 

JO. ‘J 

2X3 

IrJOt-U.JIU< 


3 

•H. 

— 


*-• 







1 



a 

Cj| 

VJ 










250 


Uufc'MPLOYMfNT RATE 




















ACDA/E-156 



1 

If 

a 

a.o c x 

a «. a ir 

k e a. 

X c r. 


— A 

A X 

c 

A 

A' 

c 



^. 

0 • 

* 

« « • 

0 0 0t 0 

• e » 

0 9* 

* • 

0 * 0 

« 9 







« if e 

1 

tf •«■ 

4“ 


M 

wav 

tV. A. If 

AAA 


A 

a *r 

«r; 


i 

c 






r 


» 

9 



A 1 

*1 



lj 



«9 ^ -k- 



c 













1 




V c 


a pc. 

c 

a c x 

c- r c r 

a A x 

If (V If 

A 

A A 

r c 

c 

r 

r 

A* 



u ^ 

49 

• • 

• 

0 0% 

• • • • 

% % % 

• # • 

• 

• • 

a a 







y L. « 

Z Cil 
u tv 

o- 

f\ n 

XI 

tv. »r a 

xi r c 

V. X IT 


A \t 3 

A- 


i 

<r 








» 

»** 

I 




r 

11 



i. 




X A — 

uj r 
u u. 


tv h- 

0 

^ 3 »- 

X X A 

A 

0 0 

49 


X 





' 

X tv « tv 

— re 

4*4 C 

c 


U V. ^ 

e* 

• » 

• 

• • • 

• • • • 

• • • 

4*0 

0 

• • 

• • 

• 

♦ 





►- e a 

•- 

i ►- 

1 

l — l 

tv a tv r 

- C | 

AAA 

*•* 

1 t 

t A 




«»■ 



C U. i 


1 


9 

i 8 * 1- 

1 A 

i 1 « 

I 


r- 

» 


0 




a — 





• 

1 




i 

i 






w 
















cr — 

CV 

c c 

c 

c c c 

c c; e — 

C — A 

c e c 

•*“ 

c r 

e x 

c 

!<• 


49 



u a 

*— 




! 

1 

1 



•l 


1 

* 




t i 

Z IT 

U' — 

a 

u 











t» 







A*! 


U 


c e 

c 

G - C 

o c e a 

e a a 

c e c 

A 


C A 

e 

I*' 

X 



U c 

*- t 

C tv 

A 

w 





9 

t 

1 




1 


1 

1 

i 

t 










£ 

c 

c c 

c 

e e c 

c c: c fv 

e a c 

c e c 

a* 

C a- 

C A 

47 



A 



*- a 

U. 1 

•*» 

i 1 

9 

1 l 1 

iiii 

i i i 

i i i 

l 

i i 

1 1 

a* 

i 






4» 

































u 


e c 

c 

c c c 

c e, c c 

CCA 

c. c e 

A 

a- K • 

c o 

c 

a" 


a*» 



2 U. 

c 

* . 6 

1 

S » 1 

«li« 

1 1 1 

9 1 1 

. * 

• i 

i 

a— 






c — 










i 






►- c 

















UJ 

1- *~ 

Ui X 



If 

— e c 

C. IT -< 0 

O A A 

•C if a 

a 

— X 

X a 

X 

if. 

X 

A 



J? a 

tf 


#>X 



— If 

V— 

ir 

- X 

X A 

c 

A 


C 

• 

-o 

® X 2 











a 

C 


49 

9 

9 

G 

is *c 

*r tj 













t 



*4 

o 
















tJ 

¥■ 
















c 

















o 

x a 



X rv .i c 

OiiS 

CMC 

tip, JOMC 

X a 

A 

a 

x> 

«*4 

a 

w 

C 2 

A 



■X* 


— X 

G»* 

X 

— X X A 

O* 

A 


o 

• 


*■ c 











a 

e. 


a 



1 u. 












<**» 

1 



H 

Z 

















r 
















< 

u. 


o o 

o 

c e c 

0 

0 

0 

0 

COO 

c o c 

o 

o o 

e o 

»*4 

— 

a- 

o 


M 

u 

X 











« 

9 

i 



2 *-» 
C C 

















»• 

















-1 

















y y 



















|X «*• 


tv c O 

o X «■ P- 

c e e 

m in a 

c 

A X 

x or. 

A 

n 

If. 

X 

A 

UJ 

vf 

«x 

•»s 


^4 «x4 

if. 


X 

- X 

x -• 

O 

A 

*M 

o 

• 

““ 

S 5 












C 


a 


#• 

0 '•* O 
















< 

S *u 
















X 

S3 ^ 

















X 

















It 

















a 


aw 

X 

tv c a 

O «£ — 

C C «• 

X/ un a 

o 

A tC 

X «: 

X 

a 

X 

X 

e 


c X 

a 


•-* 

•**4 


*1 if» 

•*« 

if -X X 

vO 4-1 

o 

A 

a^ 

o 

• 


UJ c 











a 

e 


3 

a 


a y 

















z 

















3 

















a. 


o o o 

oo o 

o o o o 

o o o 

o e o 


O —• 

o o 

a 

a 

XI 




u. 

o 











? 

i 

s 



2 — 
OC 


S9 -1 

Jr x x 
S? a O 

5 • y 

ea O' 
n 


ci»<h ooj *r i/> ao w j x tv. a 

a a a a -< a a if a ,o a o vO a o a -< 

a o 


<c 

■3 

a 


If 

m 


x 

k f 

oo 
_i o 
2 


f, Pg 3 if OCAAOO*»OfaO>f\JCO>eA 
-« a —< A — a if a If a .f X A 


fO 

o 

a 


X 

a 

o 


z » 

a o 

a 


CO 

» 

a 


o y 
o a 
a. a 
a x 

if lit 

Z a y A 
UJ O U _J 

1 *-> 3 —• 15 

3 a C A * 

a y © a 

a y 2 f U< 

x 3 o x a y u 

>-> O Z —* *-* 

if a •-• f C A X 

3 a z z © x cc 

C O •» O 3 uj < 

Z 4 1 J IL I- A 


UJ © 

a z 


if 

UJ 


*- r 

—• i/i 

2 — U 

X y — 
:!/>•: 
u. z -i a Ui 
M1<U> 

a i u 2 

U.A — — X 

X Z X I o 
1 « UJ U K 

3 2 X <t o 

y x y x x 


a. f 

M UJ 

3 tr 
c 3 

u A 

y 
a « 
x u. 

i r 
o. z 
•-* < 
X X 

If 

I u 
X if 

X X 




UJ 


H- 




i/i 


A 


z 


A 


UJ 


< 


U.' 


z 

Ul 

if if 


A 


X 


UJ 

y 

3 Z 


if 

H- 

A 


s 

X 

o o 


UJ 

> If 

o 


A 

o 

X - 



O UJ 

-J 


© 

u. 

uJ A 


• 

o y 

X' 

X 




X « X 


a 

X 

2 

X 

X 

< uu 


i tf 

z o 

UJ 

o 

X 

o 

V HI M 


If UJ 

- u. 


HI 

UJ 

(£ 

• Z A 


z o 


y 

A 

-H 

< 

if 3 -• 

UJ 

H HI 

J o 

< 

< 

3 

y 

2 i y 3 

• > 

A Ul 

A 

_J 



< X *"• 

« 

Z X 

> X 

o 

3 

9 

• 

X C A 

X 

HI lu 

A X 

A 

a 

> 

> 

A o 3 

H- 

«* f u < 


3 

—4 

-4 






X 

u 

o 


251 


ONEMPLOYMFNT rate 















ACDA/E-156 


IT) 

« 

if 

u 

o 

Z 

u 

a 

UJ 

U- 

u 


i 

—! it, 

ar vc 1 v 

I 

•if 


— 3 


U SCI 
C I 

tv 


z 1 

u. 

L — 

a ft 

U I 

CL h 


in 

U 

C 

z 

X 

e: 

u 

x 

u 


~ tv 

a «- 

l 

if 


O' 

i 

t\ 


« -4 


i I 

k o »n 0 cl ir it h ct hC 0 #r: o <\. 

• * • •'» • • • ••• • • 
j if ft r if ft f I v r a r O 

tv 

I. 


t 


4 i»" 
m • 
t VCV 


•- tv 

1 I I 


•*-» flC 

• • • «* 
l I a 
t 


r — 

CV r - 


C ft 
ft~. OJ 


a a O 40cCr-iJ-ifift«t.C — 


l 


if «c wr. le- ¥~ c i ~ tv tr a ft- 

— k r 

• i l| 


¥ X 

I- 

I 


eaftaifcftcc:ifttci»a»‘'ctv<vc a — 


—; i 
i 


C C «V — 


• lArM* •oifrrf.*-*-*- IM a I 

i i m ft i i' til ii •( r. i 

(I l! 

I 

-tc^cfcif-cccirife-f tv if 

tv | I -•'II 

• *, 


^ C r - ft J^ftCftCfftCCCCfi'^f rr l C 

1 *" 1 i •-tV »- I I 

I I 


a 

c 


a 

l 


X 

I 


IT,, 


C. 


x 

I 


o 


If! 

or 


r- 

l 


cercrc^^cccftiff. •cifwt^i e ft 

llllllllialt - till ill- c • 

li I - 

i 


CL 



u 

z X 

0 

/*> 

c *- 


TJ 

*- c 


Cl 

■ J 


J 

d 

■H 

4J 

w a. 


0 

h a 

ac 

O 

w x j 


Q 

X * c 



5 mo 



to o 


H 

¥ 



a 

5 


i a 

C 5 
— c 
x o 


ft 


in 


x 

*— 


u 

ft 


7 — 

U 


c c 

If' 


*— 

““ 


J 

-T 

u 

J 

o 


ft* 

4 

H 

W 

cc a 

If 

z 

1 / 

g 

* c 

c 

cn 

• o 

x 

ft 


X 

¥ 


Q 

O Z a 
UJ c 

a o 
z 
d 


u. 

X ¥> 

z — 

C Cj 


CCft-rlT-flCiCC-C •• OCIf 

c — c 

ft 


ft 

O 

1 . 1 1 1 . 1 . 1 1 1 1 1 1 1 1 1 1 1 1 

1 

tv 1 

1 

X 

1 

1 

x- 



-oo 

0 

c c. 

X If 

0 

ft- X 

c 

cr 

If! ft- 

m 

a cc 

m 

a 

c 

•—t 


a 

tr 

tv ff ¥ 

tv 

-£ tv 

3 — 

c 

<\ 

ft 

¥ 

CV — 

t- 

- if 

if 

if 



c: 


• 





•» 


c\ 



K 


K 


c\ 

¥ 



t* 














Cv 

¥ 


c\ 



K“‘ 

n a 

& 

H K* 

c 

<C 

<c a 

1 ^ vC 

a 

o 

IT 

a: *r 

a 

CC 

r- 

CC 

<c 

«T 

¥-1 

CC 

a 

tv 

a 


r" >£ 


•J 

•r- C 

tv 

t* 

j 

tv 

- a 

r— 


if 

if 

3 


tv 

¥“ 

• 









C\ 



K. 





»<- 

If 


K. 


















tv 

If 


tv 



OCCOOOOOO—* 00 »H 0 CC^—Itvioo 

tC 

tv 


o 



1 

i 














• 

• 

• 

• 



r- <e 

o 

c 

IT C 

CC f> CC 

ft- c. 

O 

tc if. cc •* cp 

X X 


ft- 

If. 

ir 

IT 

X 

t\J 


a 

KV 

-d tv 

a —> vO 

(M 

X 

if) <\l —< (E ^ 

ft- If 

a 

ft- 

o 

« 

CM 

• 






•— 


tv 

¥ — 

a rr 


tv 

if: 


f*'. 

»r 












tv 

If 


tv 



*-> f-- 

CC 

c 

o 

K-. © 

ft- If 

r- ft- 

© 

a 

tC if CC © 

ff 

a 

X 

a 

X 


•-* 

a 

a 

<VJ 

o 

a 

rO 

X CM 

O' 

X 


X 

X CM —« ® 

•M 

ft- 

X 


X 

o 

o- 

(M 

• 









(V 

*o 

¥— 

3 

K-. 


(VI 

•X 


fO 

K- 















rs. 

X 


(V 



o o — © —. o if o o x, *4003 mthc o tv o 

KV | fO 
I 


J 

(O -J 



CL 

t X 

o o 

JO 

z 


'Vi 


* ftJciHjcaiCftftcj a if i k. c h x-h 

•M tunavij-to VI >o i) N ^ I -VI a il 3 

•-< fV IO •< 3 Ift) 


'IftSOaflOMfO'MJ'flft 3 ft- * 3 (M -0 -I 
tv tC 3 K> N 3 •• if) *-i X if) CM •-• ft- •»i ft- »f a 

•4 cm *o •* a *o 


X 

X 

(V 

X 

If 

ft- 

O 

X 

CM 

• 

CM 

X 



rO 

tv 

X 


fM 



X 

» 

•-< 

X 

X 

a 

o 

•H 

CM 

• 

'M 

X 


lO 

a 

CM 

X 


(M 









Ll. 























a 

J 




a 

X 





IU 




ft- 









o 

•-» 

UJ 

o 



UJ 

X 




L- 




z 


ft* 







a 

ft- 

T 

z 


D 

a 

XI 




4t 




X 


Z 

Ui 






G. 

X 

3 

•4 

x. o 


X 

X 



ft* 




X 


UJ 

o 





X 


UJ 

►- 

X 

X' 

X 

*— 

D 

-r 



X 


I- 


>- 


z 

cc 




2 

ft- 

j 

ft- 


X 

j 


u 

5 

o 



UJ 


> 

X 

o 


V 

o 


Ui 


o 

o 



Z 


o 

a 

< 

i 

M 





o 

UJ 

J 


o 

u. 


X 


•— 


»—• 

o 

at 

j 


X 

ll 

UJ 

l~ 



• 


o 

o 

a 


J 





»— 

c 

z 

lii 

x 

X X x 

X 

l 


X 

4 

«/ 


X 



X 

z 

z 

a. 

cc 




o 

o 


ft- 

X 

DJI 

u a 

Z 

4 

O 

UJ 


1 

X z 

o 

UJ 

o 

X 

o 

V 

-J 


D 

O’ 

UJ 

< 

i 

0. 4 UJ 

> 

M 

< 

M 

—4 

•-4 


X UJ 4 

X 

*-4 

XI 

tr 

a 


o 

a 

a 

J 

u 

X 

1 0 2 


X 

3F 

1 


►“ 


z 

o 

ft* 


J 

ft- 

2 

< 

V— 

u 

z 

►- 


•-« 


u) 

ft- *-t «-i 

a 

X 


X 

--- 

M 

UJ 

—* 

•4 

•J 

a 

4 

4 

—s 

-j 

cn 



X 

o 

ft- 

a 

x> 

Z X X 

o 

1 

U 

z 

z 

J Q 

1 

> 

ft* 

Xl 

ft- 

J 



3> 

a: 

z 

2 

o 

X 

CD 

z 

UJ o 

i- 

a 

i/) 

4 

z 

-> 4 

z 

X 

> 

X 

O 

D 

O 

• 

C 

c 

1-^ 

o 

o 

u- 

< 

z 

X X 4 

o 


»-x 

X 

o 

r~ 

X 

ft-* 

UJ 

ft* 

a 

»- 

X 

> 

> 


<t 

f 

j 

X 

•- 

X 

J 

a o z 

z 

4 

ST 

ft- 

o 

o 


X 

X 


4 


o 

•H 

-4 

¥-• 





















G. 

u 



252 


U.vEMPLOYMf NT KATE 


















MICHIGAN TABLE 15 (continued) 


ACDA/E-156 


4 If C 

IT »»f 
« «J~ 

C , 

w a 

U *“ 
O a « 
Z & I 
U- A 

XI- 

Ul 2 
U U. 

U U ~- 

►- o e- 

Cii. I 

& 


— r 


3 * c 

“rti 

<7 

V 

z a 
c i 
*“ c 

X t 
2, 


I I 1 

• | i 

crrjch^sctlif.wcr <cc r. c c h a 41 

* *'*{ • ' ^ ® * * • • •••. * • 

a » a a r * a a ' ► r r r •- a « 3 3 ; 

• I AS ; a! 

1 • ». 


I 


i r Hit * - a ft c 


<£ a o. «n a a © r 0 «■ a a 3 sr 

A; *e aj a 3 if k w • a •*- vC 3 »-i a a tr 3 

•9 I * A»» , 31 

! ' * • •; 

•••••*••• »•••••••»•»« 

* c - ? — 1 h 

- ♦ » I 1 1 >- t r 1 t 9 t 1 t I r 

9 ’ » I II 


r 

I 


1 


I 


w^vCsssiPeiA 3M9 h a id © rwocc 

* a a if -r / j jiftc «r(\<«MNe - 

A r Tv if •« if 3 


o 

«c 

a 

r 


>c 

»r 

If 

« 


c 


t 


r 


<0 

3 


<£ 


i r. 


— 

D. 



!»•.«- C 

^4 


D. C 

>£ f\. if 

0 


c c 


IT 


— 3 

5» 

C 

A' 

if 

b 


ff 



» 





: 


# 





A 

9 

A 

If 



C 


1 









9 









1 


T 


if 




• 




• 




• 








Ul 






* 

















a 























a 





















4 

« 

a 




«v 


cj «- cr 



<V 

c 

*- 3 >£ D. 

c 

c c 

3 

<C 

yfc 

- If 

Or 


if. 

cr 

k 


CC 



i 






CM — * 




♦*» 


A. 

9 

Ai 

<C 

w*\ 


•■4 


1 




1 





9 

• 









1 

1 


c 


A 





















W. 
















• 



i 


A 


' 








• 








• 



1 


\A 























a 



C 

c 

<v 

H c c- 

C 


D 

•—< 

D. i£, f' 

IT 



SL 

•* 

A 

— if' 

r 

A 

C 

c 

►"> 


r*. 


i 

t 

S 9 * 

* 

» 

t 

* 

r j ! 

D 

s 

», s 

t 

l 

» 

i i 

c 

if 


A 

u 


j 









1 

t 






























1 






















j 







u 




IT* — O 

*D 


fv 


r 3 — 

0 

<\ 


If 

ir 

F-. 

cv c 

IT' 

c 

C\J 



* 

Ll 

0 

i 

. t 

1 5 9 

1 

* 

t 

« 

» - i 

1 

. * 

1 s 


i 

A. 

1 

0 

«-• 

o 

1 


c ► 









i 




1 


J 


9 

t 




•-4 

c. 





















-! 






















UJ 
























e—> 






















UJ 

O 

tt 



o 

c 

<u ki a 

ID 

3- If 

3 

K bc a. 

ct 

U* <VJ E. 

a, r- 

r* 

cc e 

« 

A 

oj 

A 



c 

«r 

«\ 

f- if 



If 

3 

r, 4 <\ 

«c 

a. 

1^ D 

3 

•*> 


a *-i 

« 

if 

A 


5 

cC 3 









n. 




If 

•» 

if 

cr 


If 

•— 

ID 


a 

!■* 


cc 

IT 

ir 


a 
u 
z •-» 
c c 

H *-« 

wcc a 

8 * 
z> '*■ c 
ea »0 
a 
© 

A 


COCOOOOOO-<<V,G«4OOC>CU~«<SaO0 


c c tr 3 3 3 3 a 3 o e id c> cmc 0 — acc in 
id «c ni aj »D «-*iD.D3AAAiA8C,iDAikr. ai©«c»-i 
- (V ID A If •“ if 3 


a 

« 


cv 

a 

*> 

3 

tD 


<r 

•-4 

ID 

* 

<v 

IT 


IT 


<r 

«L 

1 

r. 



a 

© o in 3 

3 3 3 f- 

3 C « 

AI ac 

if Ntf; ctHif a n 

4^ 

© 

<D 

ID 

<C 

o X 

3 >© Al AI ID 

« ID ID 

S 

AI f- 

SOlDiAllDAI^®*^ 

O 

© 

AI 

ID 

• 

UJ o 



Al K" 

AI 

' If) ID 3 

A' 

*e 


ID 

ID 

2 <3 






ID 

«c 


ID 



a 

U.I 

2 a< 

c 2 


«-»0a*0 00-»4©lD,a03 'IOONWOmO 


o- 

ID 


a a 


<u 

»• 


w 31 

OJC 

«o U 

D 

+ 

a. 
1 > 

o o 
_l u 
2 



•~4 & 

«£ If. 

^ ^ 4T 

A- 

3 

<C A A vC 

vC A CC 

AIK. 

P0 0 s IO 

iC 

tt 

ID 

»C 

3 

CM 

a •+ 

A) «D 


D 

3' 

-4 » AJ 

(O ID -V 

O N 

r** co -• 

H 

O 

•-C 

D 

• 







AI ID Al 


ID « 


eg 

<c 

"I 

D 

D 

: 










D 

CC 

D 



3(ftf3333<OD'N4'iWlfNt'flOlOJiO A 30 * 

« «c *-i tu id »^?0iDa-«h-<vr-aciD<viiDfvjx>«c>- a «h id 
-3 IfgtD fU D —I .D :? I «4 A «4 

. ID « 


« 

ID 

ID 

ID 


49 

a 


UJ 

X 


Ul 
O J 

o *- 

UJ © 

1 

Tl ^i 

►4 UJ 

ID 

UJ 

a 

a 

2 

a i~ 

a 2 


D X 

UJ 

< 

a 

a x 

3 — 

ID 

O 3 

ID CD 

a 

X 

tf UJ 

i— ~ 

UJ 

jJ 1- 

3 2. 

if) a 

a 

2 e- -J >- 

w 1/9 

' 3 

t_> 

© O 

Ul > ID 

o 

O O -J 

2 — 

o 

X «* 

X - 

o a. 

3 

“4 Zi »- O 

X -J 


x a 

UJ ►»( 

x 

a 

i-ciui 

2 X 

if. ► X 

i ^ 

X <, If 

X 

o o ►- 

a DJKUiZ 

< U UJ 

1 ID 2 O 

U 

a x ui 4 

i a 

4 y > 

*4 «( 

H H,M 

9 2 I- 

id uj < a 


^ d. J U 

X » 

o 2 

X X 

z u *« 

3 

«*4 »—• 

w ►* 

*4. ffi 

ID 

iD 

Ul »4 *-• j o i 

4 


i/IhmWO I-IX ID Z J'l O 4 »J ZUO I > >-• UJl 
DX2ZOXCDX xunJK I i/I < *,►* 4 Z X > X 
3 li C' O U; 4 13 X X <0""*10l«3fHUMll 
2 4 X .J a — u. _iXuXX<X'-O l 3i-U.»/>. U<( 


D 

a 

o 

a 


UJ 

x 

a 

3 

X 

X' 

s 

=i 

4 
> 
r-* 
O 


Uj 

o 

a 

o 

a 

X 

o 

co 

>1 

-J 


> 

u 


253 


UNEMPLOYMENT RATE 














MINNESOTA TABLE 15 (continued) 


ACDA/E-156 


1 


c 

c r 

r < tv. ir 

« <r *c tv if w 

*t C 


•- 

•- o 

tV vC ! 

tv 

0 

X 



^ 1 

If. 














•i 

« 


«! If • 


tv 

* t\ 

(\ K 3 

cv 

tv «£ tv 

a •- 



tv 

a r 

e 

** 


X. 



1 



t 



; i 

- I 





tv 



7 ! 



i r ’ 







1 





1 



11 



c 
tr c 
u - 


if 

If C 

0 o 

C 

t c tv r* 

c •- 


if 

vf 

tv a 

K C 

a 


a 

o 

C 


u u. ® 

•» 

tv 

tv tv 

<V J If 

tv 

»v « tv 
’ l 

c tv 


•— 

tv 

if a 


9 - 




s ci 






tv • 1 





<r 






u tv 



1 




1 





i 



i 



a *- «~ 

LJ T 

U U 

U CJ — 


If 

ct — 

3 if If 

>t 

atv j o 

a if 

*r- tr~ 

47 


- - 

tv c 

X 

ft 

a 

- 



► on 

«— 

1 

a •- 

1 - 1 

<V 

Cl tv tv 1 

ft 1^ 

* r 

tv 

•- 


1 f'l 

tv 


tv 



C U 1 



- i 

1 

1 

1 1 - 

tv 1 

\ l 

• 

1 

l 1 

If 

1 





& 



i 



1 

1 





1 





















•i 

• 


CT — 

tv 

tv 


— C — 

c 

-c,lf c 


c c 

C 

<£ 

ft, ~~ 

c tv 

X 

tv 


•-t 


U- St 

C 1 

r »r 



1 



» 

1 1 



1 


1 

1 


ff 

1 

1 



U — 

a 

L 

U — 


l*“ 

tV (V 

— c — 

c 

— C f- c 

— tv 

c c. 

C 

P 

r 3 

— tv 

c 

0 

0 

•r 


u a 

»- i 



1 



1 

• 1 





1 

tv 

ft 

1 



c tv 




































►- 

i/ i 

Q - 

c 

c 

r — 

c c c 

c 

- c c c 

- if 

tv c 

c 

CJ 

— K 

c tv 

X 

a 

1 

X 


*- 


1 

i l 

1 1 1 

1 

1 1 - 1 

1 1 

1 1 

I 

1 

i i 

1 1 

r" 

C 

If 



U 1 






1 







1 





*— 


















W 



• 















u 


tv. 

*- OJ. 

*- c «- 

c 

— C (V c 

e ir 

«- c 

c 

f* 

IT fV 

— c 

CL 


c 

tv 


z u 

0 

1 

1 l 

• 1 1 

1 

1 1 . • » 

i i 

. « 1 

1 

1 

1 ^ 

1 

9 


a 



c •- 
— c 











1 


i 























UJ 




































H CC 


c 

c~ c. 

<t •— if 

0 

— «C if. c 

r- r- 

C 3 

tv 

a 

(\ c 

if p- 

K 


C\1 

3 - 

X 

w c. 

cr 

c 

— s 

K' 


k- a 

C 

<£ •- 

•» 

X 

x n- 

tv 

ar 

a 

X 

X 

• 

O «£i 


•- 








Cv 

Cl 

tv 

k 

X 



K~ 

9 *c 














M* 




— J mf | 

CO r U 


















CT 


















It 


















r a 



cc tv. 

CC <V CT 

c. 

tv r- cc r 

h- c 

CVj L'* 

tv If 

a tv 

X. r- 


tv 

tv 

tv 

a 

c > 

r- 

c 

— if 

•r •- 

«*- 

f er 

c 

C •- 



x a 

(V 

tv 

CT 

•-« 

X 

• 

•- c 











tv 

c. 


X 


C 3 


X cj 
















•— 


Z 


















tL 


c 

o o 

c c o 

C 

o c o o 

c o 

o c 

o 


o 

o o 

a 

•O 

X 

O 


U. 

X 













i 

1 

i 


z - 


















c c 


















*— 


















-J 


















o _* 




















tv 

vC ■-» 

X <v CT 

c 

(V iC —■ ™ 

vC X 

— 3 

tv 

m 


X x. 

c 

X 

X 

;r 

•r-i 

coa 

in 

o 

-< >C 

»o 


•O X 

a 

O —« 

•-4 

h- 

x a 

(V 

CT 

tv 

a 

X 

• 

o J 


«K> 








(V 

tv 

tv 

•r 

f- 


CT 

ft. 

£5 «£C 














K" 




C3 •(_) 

« r~ 


















•C 


















* 


















a 


tV 

sC — 

* CV CT 

c 

CV lO O CT 

«C if 

o a 

cv 

tv 

a o 

X X 

X 

CC 

CT 

X 

CT 

O X 

ir 

o 

£> 


•-4 


CO 

nO h 

rH 


X X 

tv 

CT 

tv 

CT 

X 

• 

Uj C 










Co 

cv 

<v 




CT 

K 5 

> u 














K' 


«_( 


z 


















Z> 


















u 


•-* 

o —* 

o o o 

o 

1. 

0. 

0. 

o tv 

O 

o 

fp 

—4 iT. 

o CJ 

r- 

a 

CT 

CV 


u 

»o 













i 

w- 

1 


z >- 
c o 















1 



*—• 


















-1 


















33 -J 



















M 

•r 

If Cl 

0 <V 3 

o 

tv X X CT 

vC IP 

-* 

(V 

If If 3 

X if 

tv 

tv 

ir 

X 

CT 

>- X 1 

*D 

-* O 

■n -i 


•O h* 

33 

O -1 



X X 

CV 

o 

•o 

CT 

X 

• 

w s 










tv 

tv 

tv 

a 

r- 


CT 

CV 














•■H 

K1 




g .O 

M c 


















Jl 


















+ 



















a 

'W X -1 

X <V CT 

OfJvO 

X, CT 

X) m 


CT CV -4 

-y 

CT 

X JT> 


CT 

tv 

a 

CNJ 

* ar 

•M O *"* Ct 

K) M 

rn 

N 

a 

X 

H •-* fl 

X 

r- 

tv 

a: 

IP 

X 

X 

• 

o o 







CV 


<v 

cv 

*n 

f- 


CT 

CT 













ft, 


H 



Z 








aJ 













n 






a 

V/l 







o 


u 

o 




UJ 

to 






a 

H 

CT 

z 




a 

u 






a 


* 



IS, 

o 


t r, 





•X 


UJ 


X 


UJ 

■uJ 

f- 





z 

*- 

_i 

►- 

•-4 

X. 


-J 


u 

o 


\L 


o 

VJ 

-j 


Z 



o 

X 

< 

X 




—* 


*-• 

O 

X 

-) 


—« 

X 

u 

UJ 


* 


►- 


X 




X >- 

X 

1 


■X 


f— 


u 

o 


►— 

tl 

X) 

_»a 

ui a 

z 

< 

>* 

-J 


D 

a ui 

< 

1 

a 

< uj 

> 

tH 

« 

Tt 

a: 


x a 

a 

_J 

u 

X 

i 

U Z 


X 

J 

1 


U 

z 




-* 

UJ 

►- 

M t-i 

X 

yi 


to 

WT 




CJ 

r- 

X 

3J 

T 

X X 

c 

i 

u 

2 

3 cr 

z 

2T 

o 

K 

cr. 

X 

M 

UJ u 

y~ 

a 

i/i 

< 

-< 


•1 

O 

O uJ 

< 


a 

X < 

O 


1-4 

X 

£ 


X 


a. 

h- 

u. 

-J 

a -j x 

X 

<* 

X 

*— 


xl 


1— 




►- 


z 


i— 


< 


UJ 


z 

Ui 

yj h* 


X 


Ui 

o 

Z i/> 

►- 

>- 


X 

a 

O UJ 

> CTI 

o 


>- 

o 

4-4 

O Ui 

_» 


o 

u 

4— » 

O O. 

a 


-1 


< ct a 

a 

X 

«z 

a 

a 

U UI 1 to 

z o 

Ui 

o 

X 

o 

•-4 4-4 to UJ 

< u 


4-1 

Ui 

CD 

z f~ z u 

•-4 

-) 

1- 

z 

<* 

^ h y m m 

-J o 

< 

< 

X 

_l 

X J O 1 > 

M UJ 

1- 

J 



x -* < z a 

> X 

o 

3 

• 

• 

q i- a —• uj 

•— CL 

►— 

a 

> 

> 

o a >- u -0 

u < 


o 

-4 

-4 




a 

O 

u 


I 


254 


UNEMPLOYMENT rate 





















ACDA/E-156 



nr 

cv. if- at ; cl r- * a «., ,» y- v. s» <6 cVj 

r tv Vt 

>c 

4T 

»* 

v. 


« If cl 

1 

V. • If 


cv tv if, trts «v i"- 

- cv -■ «- tv r 

ir e, 



•i 

* • 



i 

<»■> 

r 

tv' 

11 



i 



c 

X c 
u — 

4t 

a c cv o tv 

i 

i 1 

€V r Ci 

« 

«r 

f* 

4 

ar 

l 

r 


Uti. « 
2C.I 
u. cv 
a: 

**4 

tv n a » j c p~. er 

l 

CSc ^ f>| & 

1 

^ N’ 

r 

1 





ui Z 

U U. 

Ll O — 


»r. ocvG-r-tucvc. 

o e. Nr->t.~tv« 

»- c- 

UC 

c 

c 

CL 


*- C f- 


1 r — ! — | c cv cv cv 

t C tv tv Cv tV ^ 1 

i i p 

fV 


«\ 



C k 1 


• i t » ? 1 - 

CV i 1 1 1 1 


1 


c 



Ck « 

w 


• 1 

t 

i 






X — 

tv. 

tvc — eci*' —i e Gtv 

ctvccccr*- 

f c r 

X 

c 


• 

0 


U a 

**• 

t 

t 

| 



i 



i 

2 if 

i*J w 

or 

u. 

U. — 


<c c s 

>£ 

Cv 






cvc-ceif-cc tv 

cnctccr^ 


u. sr 

*- 1 

c tV 


t 

t 

» 



t 

•-C 


»- 

x 




i 




# 


Cl —* 

c. 

oeccec-^cci' - 

ex'—.-e c^c 

— ca. 


ir 

cu 

ir 


U. 9 


1 « 1 1 I 1 « I I I 

1 1 • 1 1 1 > l 

1 t 1 

c\ 

c 

tv 

cv 



*••4 









w 










u 


tvo^-cctv — cc-> 

OC^OGCI^^. 

IX o c 

c 

in 

a 



2 U 

o 

i t 1 i » • l l l i 

t ) 1 I. 1 t 1 t 

I 1 

tv 

cv 



c »- 
c 

_J 




t 






W 










Ui ^ 










a 


C «lf. CC. 

srir<t^r^<c.tvjar 

— r- c 

»-e 


H 

tr 

c- 

£ , a- 

a 

V •- V tv X fV tv 

»•< f’’ cv <v <v 

a r. tv 



r. 

tv 

* 






c 

a 


tt 

r 

5 *C 






tv 




3IOU 

*» o 










# 








• 


X c. 


OtVf«^G*rtCf^^3-0- 

^ vn ^ c- if!»r 

>0 «c o 

o 

f- 

o 


o 

c » 

fg 

f- — r tv >c <\ cv 

« ir tv tv tv 

j K a 

r 

c 


tv 

* 

*- c 





e 

3 


*r 


x u 






tv 




Zl 










3 










u. 


©OOOOOOOOO 

oooocooo 

OC O 

eg 

<n 

cv 

•HI 


u 

X 


1 



i 

» 

» 


2 *~ 
c c 




















-J 












c «t)ono n* «c a n- 

G Kj «£. — N i If if , 

»f. «, K>’ 

X 


f- 

rg 


Hffi c 

X. 

P» •-« »0 fV v£ CV CM 

-«to (M evj cv 

JAM 


tv 

tv 


♦ 

W 3 



*-• 


a 

St 


cc 

m 

o >oo 






tv 




O • i i 

a * *- 
«I s * 


- 








<c 










If 










a 



m >c ^ o^ytr. ixaiir 

j» 


e 

n 

vC 

Q X 

0 

f- -< fO ('4 >0 <M «V 

—I KV (M CV* OJ 

G io cv* 

#«< 

tv 

«o 

r> 

• 

UJ c 





« 



® 

m 

I o 






tVJ 

1 



2 




i 



1 











• 


u. 


1 

0 

0 

0 

0 

1 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

1 

0 

<\l O O 

® 


o 

CM 


u. 

!«V 





1 

*•< 

1 


2 •“> 
c c 







* 













_J 










cQ 










*-« 


-• -* c- r, cr-'CJvC 

3 fix -h X if if. 

r- <r « 

r- 

in 

n- 

XJ 

n. 


•VJ 

r- *g -o <\i c tv oj 

** "O CVJ tv evi 

^ <o tv 


(VJ 

cv 

lO 

• 




#-4 

X 

3- 


ffi 

K1 

B *o 




i 


(V 




5*o 










S3 0 










X 




















Zl. 



3 N X «* 1' XJ ^ if! 

Ifl E - 

T 

CM 

y- 

X5 


M I 

«"4 

f" -I K5 fVi vC CV Cg 

pg (M 

^ to (V 

O 

m 

m 

IO 

• 

o o 



H 

H 

X 



•» 

X 

_J o 






cv 

1 



2 


UJ 


1 

» 








3 -1 

a id uJ 


►- 







o « u o 

<-• UJ t/> t- 


z 


K- 


u> 



cr. i- ct 2 

3 1 UJ < 


UJ 


2 

Ui 

V- 



a >« 2 *-* 

if. O 3 vA I/) 


X 


UJ 

o 

< 



X Ik) i- z 

uj u; 2 2 vr. 

K 

>- 


X 

X 

X 



’ ? h j »- ►- i/> 

_J U O O uJ 

> v/5' 

o 


V 

o 




UJ O O _l 2 •-• 

U Ct < T — 

O UJ 



o 

u. 

►«* 



x <-> 3 ** o a -J 

« X U. UJ l- • 

O O 

a. 


_j 


z 



X *-CSu.2XX?>- 

I i x x < x cr 

X: 

» 


i 

X 

u. 



t- O O V— U. 3 JI 

Ul CL Z < U UJ * 

U1ZO 

UI 

o 

X 

o 

X 


V 

_J 3 X UI « f Cl. < US 

LA UJ < iL 


*-« 

UJ 

® 

>- 


x 

302 5. JUS toz 

X * t Z *- 2 

o -• 

_j 

h- 

2 

♦< 

o 


►— 

U2H- • UJ ►“ •“• 

Xl/I UV 3 — UJ •*• 

« JQ 

n 

< 

3 




l/t 

M M|/l Q f X ® Z t'l 

O 1 U 2 * _J Q 1 

> *1 u»l 

*- 

-1 



a 


3 

*2zoxiii"uyi>iri/Ki«<z 

X > I 

o 

3 

• 

• 

s 


3 

C — OOui< 3 ax. «* 

o — « cr o.i- at « 

Ui "» X 

fr- 

X 

> 

> 

U) 


2 

< ZJH^U. JXU I 

1 

i<sc jbi-u. 

I^t o <, 


o 

•-* 

*“4 

Z 


*-4 

t 

255 



a 

v> 

(J 

3 



















MISSOURI TABLE 15 (continued) 


ACDA/E-156 


i 


—* sr, 

«B w cc — 

I■ 

X -i r, 

« _J — 

c 

U l 


U 

— 

iJ 

<J U. 

a 

r< 

Z.C 

! 


U. 

<V 


O' 4 - 

, 


UJ 2 



u. u 



U t- 

—- 

V 

► c 

I*- 


C L. 

8 


a 






x 

1 

<V 

U 

•I. 

4 >- 

U 

I 1 


2 

If 


L. 



Q 



U. 



u. 


*— 

u. 

a 


•— 

« 


c 

<\ 



w 


4 " 



X 



a 


c 

►- 

r- 

*- 

u 

l 



IL 
2 U 

c »~ 
— c 


w - 


c 

Q 
X 3 
• C 
K" O 

o 

* 


o 


cc 


ft x 

a'tr. CO K1 O 

«t 

3 

c 

v 

r< 

>c a 


«-4 

•— 

G 

ft. X 

ft. 


X 1 

u 















* * 

• 

• 

* 

• 

ft A 

ft ft »t 3 ft 

ft 


«f 

r 

c 

t 




ft. 

3 

if 

e 



4 — 


9 






r 








tv 1 



^ 4 ' 


» 



1 


1 








! 



a 


c a 

COCAO 

3 C 

« 

ft 

0 

c\ 

a 

•- 

X 

x 

cv 

d 

pr c 

if 

«► 

cti 


(V K 

r w 3 c a 



>£ 


a 

9 



44 — 

ft. 

IT 

3 

ft- 



a 


rl 






3 








if 






1 



9 


t 








s 

1 



'! 


3 C 

1 

C. 3 ft/ 3 C 

a 

o 

-3 

a 

ft 

Cf 

c 

CV 

a 

r\ 

C 

- 

l 

ft. c 

X 

ft 

»r 

ft 

9 ft 

-> ■ 8 1 ft 

<\ 



«- 

0 

■a 


k 



•— 

•» 

1 ft 

ft 


<c 


I 

1 t 1 

i 

• 

tv 

c 

X 

9 

9 

9 

i 

1 

1 

8 

f r 

8 








s 


1 








8 



•■1 





















<\ c 

ft — C ft c 


c 

C 

«- 

p 

c 

c 

c 

o ft 

ff 

ft 

«r- *— 1 

tf 

if 

<* 

c 

s 




1 


1 

1 







J 



1 



ft C ft ^ C ft C *-C — ft c cc cc 

3 ft *- r 

IT 

If 

a 

• 

1 - 1 

W 4ft* 



8 


( 1 

9 






( 





• 

• 

* 

• 

c — -ft-ccce — - a 

c r ft 

K •- C 3 3 - f 

3 

or 

K. 

ft 

8 * 1 1 1 I I 1 8 - 

8 - 1 

1 1 1 9 1 1 1 



v£ 


1 

9 

1 

1 





Cv c: fNw •- c. cv. •- ft- o' — c o aa o 

CT 

ft 

r 

a 

• * i •. a • i i i » i i i ». i i i i *~ i 

a 


if\ 



i i 


(\ic ec ft 3 X to e .-rr-Kcco.or'ioo-tOr- o vC 
A- f- ft- K — l ,r N*'‘ >C3 x c 

- ^ r tv . a- it 

«- 3 


O vC 

sCj O 


3 


r~ 


X c. 

C 3 h- 

► C 

x o 

2 


jccowirf3c^ti< , irictiOinif,os ec 

h - ff K K ff If 4 C\tf3ffft— 3X3^0 C 

«- k tr c\ a 



u. 

u. 

2 *- 
c c 


CJ 


©ocoeocoeooo— coo-<oft©o 


in 


c\j 


3 


(V/ 


H 

_J 





















bj 

ft— 


3 a 

cr 

X 

<v in 

X 

3 C. 

If. CC 

a 



c 

r- o 

to 3 

o X 

If. 

«r-4 

3 

X. 

c 

O 

x a 


ft 

ft 

K> 

lO 

ft"^ 

to »o 

X ft ft tO 

X ft 

-< a 

X 3 

to 

X 

o 

X 

o 

• 


3 














to 

ft , 

A- 

X 


tf 

to 

CO 

*.C. 
















#— 

3 


4— 



•O 






















ft- 






















>c 






















*>/ 






















a 


3 a 

p 

X 

ft ip ir. 

3 G 

x e 

a 


fO 

o 

f- o 

ft ft 

G X 

P 

O' 

cr 

fP 

cv 


o X 

3 

ft 

ft 

K5 


•H 

*o o 

X ft 

r\j »n 

X 

ft 

4—4 to 

« 3 

to 

X. 

O' 

X 

o 

• 


X o 










— 



K' 

fO 

cv 


X 


X 

rO 


2 V 
















*—4 

a 


4— 



2 






















ll 


—* o 


CJ 

O ft4 

O 

->4 O 

—• O 

o 

cv. 


o 

r> a 

cu vC 

o o 

•-» 

a 

<x 

»o 



u. 

fO 















CVJ 


^4 




2 — 

c c. 


















1 















































flQ 

-J 








<f> 0 















3 a 

o 

r- 

ft >£ 

X 

a o 


a 

f'- 

o 

r- Ow 

K: 

o a 

X 

4-4 

OJ 

X 

o 

1-4 

•ft *> 

V9 

r- 

X> 

-o -« 

•o K> 

X ft 

ft 

•o 

X 


—» a 

X 3 

r- to 

X 

o 

X 

o 

• 

UJ 

i 










♦-» 



to 

to 

ft 

o- 

X 


X 

ft 


3 C 

















3 


4-4 


§ 

• o 






















3 












































tf 






















X 


/O p 

O' 


ft i£) 

pi 

rO O 

ft X 

—4 

X 

■>i o 

h- CC 

ft — 

O' 3 

a 

r- 

o 

to 

O' 


« X 

H 


ft 

K*> 

tr 

4-4 

»o to 

X ft 

ft 

fO 

X 

ft 

4-r ro 

X 3 

X to 

3 

O' 

A- 

o 

• 


o o 










•H 



>o 

o 

ft 

O- 

X 


X 

to 


-1 u 
















4-4 

3 


*>■4 









u 














Cl 

-J 






a 

X 







o 

4-4 

UJ 

o 




4-4 

UJ 

X 






a 

K 

a 

2 




O 

a 

UJ 






a 

X 


— 



x o 

3 

X 







Ui 

»- 

X 



UJ 

UJ 

t— 

3 




Z 

*- 


h- 

/>« 

X 



-J 


u 

o 


UJ 


O 

V 



2 

►■4 



U 

a 

n 

I 


ac 


— 


*4 

t— 

a 

-1 



M 

a 

u 

UJ 


.. 


►— 

*7 

3 

u. 


X if 

>• 

X 

8 

s 

a 


H 


u 

o 


H- 

tT 

D X 

a uj a 

2 

•X. 

V 

_j 


o 

oc 

U 

< 

i 

0. < 

u 

> 

4-4 

«* 

* 

ao 

—4 

o 

X 

a 

-1 

u 

a 

i 

O 

2 


X 

Z 

l 

;~ 

vt 2 

t~ 


*—4 

*—4 

UJ 


1—4 


a 

X 


X 

X 

*—4 

k— 

X 

o 

H 

□I 

CO 

Z X 

X 

o 

1 

u 

2 

D 

2 Z 

•» 

o 

X 

QC 

X 

k-4 

UJ 

O t- 

a 

X 


Q 

O 

4— 

o 

c 

UJ 


D 

X 

I 

<L 

o 

—« 

r. 

a 

2 

X 

2 

u 

u. 

4— 

U. 

-J 

X VI 

T 

z 

< 

X 






UJ 









t- 


2 







< 


Uj 


2 

UJ 

X 



V- 


X 


UJ 

U 

2 



X 

t- 

V 


X 

a 

O 



UJ 

> X 

o 


V 

o 

— 




O UJ 

-J 


o 

u. 

t- 



« 

IS «J. 

a 


-J 


< 

ur 


a 

X 

X 

2 

a 

a 

u 

UJ 


9 X 

2 O 

UJ 

O 

X 

o 

— 

4 -» 


X UJ 

< u. 


►— 

UJ 

a 

z 

H- 


2 O 

—1 

_1 

4 - 

2 

< 

D 

4-4 

UJ 

►— •— 

_J Q 

< 

< 

Z> 

_j 

X 

_J Q 

• > 

M 

t- 

-i 



X 

4-4 

« 

2 a 

> X 

o 


m 

• 

c 


a 

4-4 ^ 

— a 

— 

a 

> 

> 

vj 


*— 

U. X 

o < 


o 

4-4 

—« 







CL 

u 

V) 


256 


UUEMPLOVMf NT RATE 





















WOW TANA TABLE 15 (continued) 




ACDA/E-156 


I 

v- •*r. l 

«JV 

c 

tr, c 

u. — 
c-u.cc 
ZjC I, 
u. cv 
a — 
uj 2 , 

uu. . 
u. c *~ 
& r^ 1 
C U I 
a «- 


tf 

Si 

C 

2 

l*J 

a 

u. 

u 

u 


tf. 

tx. 


u 

tr,! 

t 


« 


u. 
Z Li 
o ►» 
>“ c 

-J 

W _l 

f -4 

g'a 

p <£ S 

5 «c 

« fO © 
O' 

tf- 

X CL 
C 2 

« C 
X V, 

z 


u. 
u. 
z — 

c c 


u® a 

2 s 

KiC 
« •© 

*0 

a 

a x 

UI © 

X u 
z 


u. 
z *- 

o o 


CO _J 

S x 

S a © 
2 • © 
« <7 

f 

t* 

X 
* X 

o o 
_1 © 
z; 
© 


tr 

A 

Mt'C h CM CV, is CfCVi 

cc a 

»r »“ © k- 

T- h 


« 


& i 

o 



ft * 

• • ® 

• 

9 9 9 

• •, 



j 


ft« 

«V 

r «v - .r » «v «v ,r 

a r 

- 


r •<• 

o • 



srl 




ft* 

i 



A 



•-I 




i } 

• » i 

! 5 



• 

»j 

1 


II 



«f 

a o r Vr* cv. cr — 

eo 

ABA 

if 

»c r- \C 

r c' 

o 

tr 

d'l 



• 


« • 

9 + * 

• 

• a. d 

V' 

♦ 





CV, 

if cm cm a ir cm »o 'a- 

•o 


- 

A /J 



5^, 

0-8 



»• ,*« 

•N 

• 



•rt 



w- 




1 t 

i 




»• 



i: 



a 

OCjfw«\C ctvor 

CV. if 

A' *£• sC 

© 

Aec 

i 

cs. c 

tr- 

r- 

A- 


• 

«A • 

• • « 

• 

9 9 9 

• . 

♦ 


•» 

• 


« 

C I 1 •- 1 

•- fv 

AAA 

r 

^ 9 i- 

8 

tv 






1 9 • 8 1, 0 

J a 

- 8 3 

9 

8 8 


0 


f- 1 




* 1 

* ; 

1 

» 



1 





• 


« * 

* • O 

• 

• • •> 

• «• 


• 

j 

ft 

o 

cv 

c 

U 

0 

0 

u 

0 

0 

u 

0 

u 

© c 

c c c 

C 

— © A 

© tv 

<v 

ft 


tr 



1 1 

• 1 

8 

1 



», 


1 



9 




. 


1 

1 



1 

1 

•** 

•» 

cccecece. c 

C C 

— c. c 

c 

•* 9* ff 

C f 

»»■ 

9 

<N.‘ 

to 

«»4 


l i 

, : 

1 

9 



k 

\ 



r 

| 


c 

c 

t 1 

•-c.cccc.ccjc 

c c 

— c c 

c 

~ tz 

C 


tr. 

I 

ft 

ft 

a 

ft- 

1 

9 •< f 1 9 a 9 T 9 

f 

i * 

9 1 9 

9 

% I 1 

i r 

1 


t 


c 

l 

©o.ccccc cc 

c c 

c c c 

c. 

(N. 

1 

C O 

f- 

© 

i 

A 

o 

0 

» 

s. a; i 8 s * 5 c s 

9 t 

« i t) 

9 

5.8* 

i 

• 

. e 




e 

cc. to •£ c © r- o' ©cvj 

c c 

«t vO a 


© If ^ 

« 0 

vO 

■3- 

CV. 

• 

ro 

a: 

ft- 

ft“ 




If — tf 

»f 


a 

9- 

e 



J 






<\ 

A' 

• 

cv. 


0 

0'atC©ofw«r©cvj 

© O <0 v£ If 

n 

Ai vC 

© o 

to 

a 

If 

JO 



ft* 


•— 


If. — If. 

tT 

a 

a 


cr 









<)» 





c 

©©©oc-ooco 

C © 

o o c 

© 

© © © 

• 

o c 

*4 

© 

•*-4 

o 

vC 









l 

t 

i 


0 

cc a xc oMf,c(\ 

© c 

OC <£ u'i- *n 

-*ioC 

0 f- 

OC 

f- 


tf 

tr» 

ft* 

ft* 




m — if 


f- 

a 

«-r 

« 



» 






A. 

A- 

i 

Cj 



1 





■ 

ft 

e 

« 

ft 


O' 

ft 

4 

6 

0 

n 

7 

5 
0 
2 
0 
n 

ec >£ a 

fT 

M fO «c 

O' ?- 

rw 

t*- 

tvi 

sC 

a- 

ft-* 





If) — if) 

If. 

f- 

a 

t*4 

© 



. 






«v 

f^- 


CV. 


Cj 

ooooooooo 

o o 

o © © © 

«HO*4 

o © 

•o 

ry 

to 

r 

© 

to 









5 

8 


c 

(ta-'Xoo^kf.ofv, 

c o 

CC >£ tf) lO 

CV( *o >c 

© «Cii 

DC 

I" 

o 

© 

<\> 




•*4 


i/I H tO 

■n 

f- 

a 


CQ 








f\i 


1 

CM 


O'- 

sn'^ook jsow 

o o 

AX)/ 

tO 

won 

O' X) 

X) 

O' 

a j 

© 

H 


•* 1 


H 


in ♦- if 

in 

r- 

a 


© 


CM 


Ui 

IX 


V- _J 

X X 
t- u 
I/S —• 
3 X 

c o 
z a 


3 -i 

O Ui <3 

x >- a z 

X K X *■« 

l/> U) H> I 

Z »- Jl-Ml/S 

C U _J Z *1 
—< 3- O IX J : 

— Z£+.ZX>/)>~ 
U O l-u. 3 JQC 

D oc ui «c I a « w 
oxa-joac 8 © z 

2*— — *■» uj t- 

«-»v/io*-a®zx.x 
zzoxaiMiuu 
-OOj|< 3 X x< 

.j x u X 


X 

If 

UI 


t- 





UI tf) 

t- 


z 




3 

X Ui 

< 


UJ 


z: 

UJ 

LD O 

3> trttf 

t- 


X 


UJ 

o 

til UI 

t- 3Z 

t/> 

t- 

V 


X 

X 

_! 

O O O 

UI 

>tf 

o 


>- 

o 

u cr 

<« X *~ 


© UJ 

-1 


o 

u. 

— a 

u. ui 

« 

© <J> 

a 


-Jt 


X 1 

X x <! tf 

X 

a 

X 

z 

a 

X 

ui a 

X < U|UJ 

1 tf 

z o 

UI 

o 

X 

o 

> *-• 

« * t-»,*W 

X 1 Z r- 

1/1 Ui 

< u. 


M 

UI 

© 

X 

Z U 

M 

-j 

f- 

5, 

« 

X I/I 

i/i 3 •-* 

»va 

J o 

«s 

<st 

5 

-1 

© » 

U Z X _J 

m Uil 

t- 

J 



t- X 

If) < *•-« 

< Z X 

> X. 

o 

3 

•1 

• 

© —< 

" a Oii- 

a •-. u 

*•* Xr 


a 

> 

> 

X < 

X ►- 'J 1 © 

►- u.«/) 

u < 


© 


•■4 


1 


1 


a 

U) 

u 




257 


UNEMPLOTMf-NT KATE 4»& 3«6 . 4,0 3.ft 

















UFPRAS«A TABLE 15 (continued) 


ACDA/E-156 


-1 

If. 


< w «c 

1 . 

1/1 -If ‘ 
«c _ — 

c 


ft 

If c. 


4 

u. - 

a 


0 u. «; 

Z c 1 

U ft 


ft 


a ft ~ 

u.' z 
u u 

U C. ■— 
ft 0 ft 
C U- I 
CL — 


I i 

CO 3 fv (\ f'fv o. ft CM'lf ift?’ Hr t hi 
ftjftslf ft ft 


tt O «— •“ r- ft 3 f 

I II 


0 1 
ft 

C 


i 


t 


itacffft--«ro ft c o o ir — if 4 ft tt ft c 

|ft «V If 3 ft ft' 


ecvevj-- — —> tv ir ^ ft 
. •» ft-M rj 

it • t 


ft 

•i 

ftl 

ft 

I 


If ft 

7 : 



3 — c 

r. 

v£ 

ft ft 

4 K 

e s 3 

C. 

a 

a 

ft 


c 

c. 

ft c 

<4 

•- 

ft 




















1 ft - 

t 


1 ft 

ft ft 

ft ( 4 

■4 

r 

ft 

c\ 

•- 

•- 


1 ft 

c 

•ft* 

4 


1 1 

1 

1 

1 1 


I 

1 

1 


1 

1 

1 

ft 

1 


c 


1 / 


c\ 


0 


c 

c 

c 

c 

c 

c 

CY 

C 

c 

c 

c 

c 

c 

ft 


«• 

c* 

3 

3 

ft 

tv 

4 

u 

C 











i 


t 

t 








t 



* 


t_ 

1 

























• 


X 

u 



























u. 




























e 




























u. 

J.. 

CP** 

ft 

C* 



c 

c 

c 

c 

cr 

K 

c 

c 

c 

c 

c 

c 

r 


4 

c 


ir 

0 

K 

<r 

u. 

a 

•- 










1 


1 

1 











1 


*- 

« 



























c 

«\ 




























w 























































1 / 




























0 

*ft- 

c 

c 

c 

c 

c 

c 

c 

c 

c 

c 

.* 

c 


•ft- 

•ft- 

c 

c 


c 


c; 

a 

4 

r- 

4 ft" 

•»- 


r 


1 

» 

1 

1 

1 

i 

1 

1 

1 

! 

1 

5 

1 

1 

1 

1 

1 

1 

1 

» 

l 

•- 

•ft 

c\ 

•- 

u 

1 























« 





u 

Z (JL 

c — 
— a 

U 4 ^ 

to ff 
§ 4 § 

P 


W 

s 

* 


H 

U) 


3 


ftCftecceoc r- o c c r- c c: r-’ u cc 

I I I I II I « I I t t t t t I it I I 


if 

l 


OJ 


IflflfP O vC CM 0 PJ a fw ft". If P IvDhvft-tC 
4 (\i — <\ c ft *- c — e 

— — — if 


c 

K 

If 


CM 

ft' 


ft 


ft 

C 

4 


ft 

Ift 


x a 


4 If. 

4 > O C 

4 ft 

C ft 0 

<v ><" 

4 0 

cC 4 

O ft- 

r** 0 

r- 

If 

4 

ir 

a 

c » 

ft 

4 


ft 

ft 




<r- 

<\ 


— i\ 



ft 

— c — 

c. 

K 


c 

• 

*- c 














•—I 



4 

4 


4 


1 0 


















•-< 




£ 






















u 


O 

O 

O 

O 

O 

O 


cz 0 

Cj 

O O 

c c 

O O 

c 

c 

— 0 c 

H 

ft 

ft 

c 


u 

4 










1 







« 

1 

1 


IT 






















c c 






















ft- 






















-J 
























4 4 

4 

c 

O 

4 ft 

0 ft 

4 

ft pf 

4 ) O 

C 4 

c 

f~ 

h- •—< iT. 

4 

4 

c 

K) 

ft 

x a 

If 

4 


ft 

CM 





ft 


H C\J 



ft 

•-« O 

a 

X 

ft 

H 

• 

5 














w* 


•— r- 

IT 

IT. 


4 

K\ 

cc 


















•- 




•Cv 






















r- 
















1 






4 






















y 






















Q. 


4 

4 

4 

O 

O 

4 

CM 

0 ft 

4 ft PT 

if ffl i C 

ft- 

4—4 

4 . 

ft 

ft 

pr. 

4 

O S 

JT 

4 


ft 

ft 





ft 


— ft 


0 

ft 

—! O —< 

a 

4 ” 

ft 


• 

U. C 
















r - 

4 

4 


4 


5 O 


















•-« 




£ 












































Lie 



O 

O 

O 

O 

c- 

O 

O O 

O 

O O 

O O 

O O 


0 

CM O O 

4 

3 T 

a- 



u. 

m 















« 


1 

» 

1 


r m 






















c c 






















►-4 






















-J 














































4 

if 

4 

O 

O 

c. 

CY 

0 cv 

4 

ft f 

4 0 

CC 4 

0 r- 

cr — ^ 

r- 

4 

0 



XX 

CJ 

O 


ft 

ft 





c\l 


-< M 



ft 

•H O •“< 

X 

3 

—« 

—» 

• 

X 














r-« 


H 

4 

41 


4 

K 1 

^ 0 






















•u 






















0 






















f) 












































X 


D 

4 ) 

O 

O 

O 

4 * 

ft Cft ft 

St 

<m >0 

4 ) J 

C 4 


r- 

r •-< 

•H 

CM 

r- 

4 


M 

•—4 

4 


ft 

cm 





CM 


•-« (V 


O 

CM 

-s 0 ^ 

a 

4 

cm 

•-1 

• 

OO 














•-1 


H H 

4 ) 

41 


4 



JM 

Z 


UJ 

x 


z 

o 


4 


u. 

_i 

•-» UJ 

*- a 
X Z 

UJ ft 


>- _i 
x X 
ft- o 
4 —• 
3 oc 
.o e> 
z < 


<_> 
D 
O X 
Z ft- 
ft 4 

z z 

— 0 ) 

X 


CJ -I 

C X 

o 

x u 
a _j 
— 
a *- 

O X 

O UJ 
a i- 


O X 
uj Z 
ft- u. 

4 I 

U X 

M l^J 

X X 
CD * 

< z 

x. J 


o 

z 

*•4 

T 

to 

-J 

CC s 
Z -I 

X X 
I 0 

ft- ft 

Z X 
ft UJ 

x r 
x u 


a 

4 


jj 


w- 




►4 

UJ 

If 

ft 

J 

z 


ft 



cc 

UJ 

< 


UJ 


Z 

UJ 

4.0 

w' 

If If 

ft 


X 


UJ 

0 

Ijj U 

ft 

X z 

4 

i 

V 


X 

X 

_l 

CJ 

c 0 

UJ 

> 4 

0 


>- 

0 

14 X 

<* 

X — 


Q UJ 

_J 


0 

u. 

— a 

u. 

UJ ft 

• 

2 CJ 

Ql 


_J 


x 1 

__ 

X «* 4 

X 

X 

X 

*» 

a 

X 

uj a 

z 

• UUI 

1 

4 Z O 

UJ 

5 

X 

0 

> *-* 

< 

Tt n •-» 

4 u «r u. 



U! 

CO 

X 

X 

1 Z ft 

z 

U *-• 

-J 

K- 

2 

< 

X 1/1 


4 n 

u — 

H JO 

< 

<4 

X) 

-J 

0 1 

u 

Z X J Q 1 

> « UJ 

ft 

-j 



i- a 

l/l < I -1 

< z 

a > x 

0 

D 

• 

• 

0 — 

ftl 

a 0 ►- 

X — 

uJ ft. x 

ft 

X 

> 

> 

x « 


ft u o 

r- U. 

4 0 < 


3 

—4 

—« 







CL 

u 

0 


258 


UNEMPLOYMENT RATE 





















NPVAOA TABLE 15 (continued) 


ACDA/E-156 


« ir e 

V 

If •If, 

c 

if c 
b 1 ■*! 
U U «J 
ZCH 
<V 

a 4- ~ 
4u 7 
U. U 
U U ~ 
—•Of*' 
C L. I 

a - 


— IT 


*- *. C 


<\ <£ 
i 


A 

• • 
cv o 
I 


r o 
• • 
I a 

7 


ft c r 

• • • 
•- a 

k c r 

• « • 

<\ ir 

ft- c ci 
• « • 
4 I 


r f. 

• • 
«v «v 

O <v 

• e 

W IT! 


SI t' S. i£ C f-~ C.tr O CV K. C\.\£,I 

*1 A K ft »« .- ft- »n »r © 

e a. i • «v, 


i 


i 


O- a a 
• • 

«c 

< • 


at- >c ft if c ft-scrc 
• « •••*•••« 
»*~ft # a 


«c rv 
r ,i 
4 


t 

I 


a o tt < *- •- ir a o o if ft n c! 
l 


cv — 

8 I 


ft — 

I - 

t 


ftlf ft ft'- I t 

a I i i i 
t 


l i ft 

«r- 

I 


ft 

( 


■ • • 
If 
I. 


<© 

*1 


If 

0 


ft- 


ir 

i 


i r 
u 
c 
z 

UI 

a 

u 

u 

u 


— cv 

cr «- 

I 

if 


a 

# 

c 


CCCCCCCCCCCCCCCC-CirCft 

• III I 


a — 


ccccocc-cccccccccft-ft-aci^ r if — if 

I 18 4 I t 


If 

a 


ft- 

4 


ccocccc-cccccccccccft-cn <c o —) 

4441 4 4 I I 4 I I I 4 4 4 4 4 4 I 41 I I 


U 
ft- u 

C ft- 

— c 

-I 

w t 

H C 

U1 Q 

> 4 . 2 

i * c 

« f U 

o 


coccrc_cccccocccocft-»cr, cc vC a cv a 

4 5 4 4 4 4 1 I 4 I 4 4 4 I I 4 I 4 I 4 I 4 


rfiOftoccf-occftiaMir.airc cv *c o cv if 

—• J ft r- if • 

cv u ev ft- 


I a 
e 2 
*- c 
i o 


ar, ^ftccof-cwocMa'ftomMfo a if r- »o >o 

—- iftc*—eta—*acc»— if* 

CK If CV if 


u. 

u 


OOOOOCCOOOOOCCOOOOOC.O —• 


(M 


c m 


c c 

ft— 

a 


H 

u 


z u 

2 


a 



















t—' 


& 

ftiMMC 

o 

o 

*•". n ft- 

c c 

ft' 

CC 

if 

CV cc. 

ftf ft' if. 

<r 

if 

O' 

G. 

%c 


cc a 

If 


V-« 








ft) 

•- ® a 


if 

ft' 


ft 

• 

5 














a 

if 


(V 

ft- 

X C 



















• Li 



















I"*- 



















<£ 






































a 


i* 

3 

6 

2 

0 

o 

o 


o c 

ft- 

«c 

O' 

cv cr 

CO ft- if 

CL 

a 

CC 

ff 

in 

o 

C X 

if 


H 








PO 

« « a 


if 

ft. 


if 

• 

UI c 














cv 

if 


CV 



u. 

ft ft— 


OOOC-OOOOOCOOOaOCO© ICO 


a 

ca a 

►— 

h d a si 

Uli >- 

H » c 
•3 * *-» 
cQ a 


JfC aCOCf.--OCM4NC f. ffN if —< 

—I rf —ft <fi a 



••4 

<C 

r' 

o 

a 

® 

-4 


• 

CM 

If 


cv 



a 

b x 

o o 

-j u 

z 


ai'iO(yooo' , iHHOoMij(MtiOftifiN io 

— f. *c ® a 


If 

>0 

:o 

m 

cv 

a 

ft' 

*■4 

if 

• 

CV 

f> 


cv 

ft. 






UJ 
O J 




a 

If 



wd 



ft- 









O ►' 

UJ 

O I 


—4 

UI 

if 


l~ 



z 




UI 





a 4- 

a 

z 



a 

u. 


4 



UJ 


z 

UJ 

4~ 





a x 


►-ft 


if O 

z> 

If If 


4- 


i 

z 


Id 

o 

4 




j- 

UJ 

»- 

T 


UJ u 

►- 

X z 


If 


►- 1 

*- 


T 

a 

X 




z - 

_j ft— 

—i 

if 


_j 

UJ 

o o 


UJ 


> if 

o 


>- 

o 



UJ 


O U 


z 

.-ft 


U» X 

< 

X Ml 




O UJ 

a 


O 

U- 

ft— 


X 


ft— 

-< o 

T 

-J 


— a 

u 

UJ l-l 


• 


<s> u 

a 


a 


z 




—- — 

Z aJ 


X 1/1 

V 

Z 4 

- 

a « if 


a 


X 

z 

z 

> 

X 

Ui 




o o 

ft- 

ll 

D -J 

rr 

ui a 

z 

4 U UJ 


4 

if 

z o 

UJ 

o 

* 

o 

Z 

► 

-J 


o r. 

UJ <t 

1 

a < 

UJ 

> -ft 

«t 

'J H H 


If UJ 

< u 


t-ft 

“t! 

Ct 

V 

a 


c 

x a 

a o 

a 

4 O 

2 

X 

z 

4 Z: ft- 


Z 

O ft- 1 

a 

4- 

z 

4 

o 

b— 

CJ 


»— 

—' — 

UJ 

ft- —< 

—4 

a if 


if X.ft-ft 

UJ 

*4 

►H 

-J Q 

4 

4 

X 

a 

a 



h-< 

if o 

v- a 

3 

Z X 

X 

O 4 

u 

Z Z _J o 

1 

> 

—ft UJ 

4- 

a 



a 

3 

3: 

2 

z o 

X CL 

3K 

- UJ u 

4- X 

If 

< z !-• 

4 

z a 

> z 

o 

3 

• 

• 

X 



r*« 

o o 

UJ < 

— 

X X 

< 

Q M 

•-4 

X O ft- 

a 

M 

UJ 

—• a 

ft- 

a 

>. 

> 

UJ 



>: 

-> u. 

*- a. 

_J 

a o 

X 

Z 4 

z 

- U 3 - 

LL 

J) 

a 4 


3 


—ft 

z 















a 

u 

u 

D 


259 














ACDA/E-156 


I 



a** 

« ir (' 

1 

l 


V ‘(f 
« _; — 
C 

O' c 
u 


uu. c. 

Z CM 

1 

U CV 

a a- 

UJ z 

u. u. 
u. © -s 
a a 

C U 1 

1 

& »- 

1 

1 

i 

1 

i/1 — 

U «, 


© 1 

X If 


UJ — 

or 

u. 

u ~ 

U. a: 

*- 1 

C f. 


*»» 


vr 

a - 
►«» ^ 

u. $ 


«■» 


L. 


X ir. 


c *~ 

V 

•- c 

3 

. .J 

G 

t-4 

to) 

4i 

c 

S c. 

o 

o a 

a 

P <£5 

iA 

a *c 

ff 


a 

to) 


3 

X Cl 

2 

© 3 

H 

a- c 
X O 


z 

Ui 

lL 

cr 

u 

*-c 

z *- 


o c 


y 

a 

3 

Sl 

_i 

< 

U a* 

X 

, _ ® a 


s » 

B 

u 4. G 

S • © 

U. 

z 

® «c 


¥ 


Cl 


C X 

u. c 


X O 


z 


3 


u. 


u. 


z >- 
c c 




3 


ca — 1 




H X 0. 

w X 


« ao 


9 • u 
§ 0 


■T 


(A 


Q. 


* X 

o o 

_J u 


2 


3 



c'st CVia 

c c r, h k r 

a ix 

a a- c. ¥. y r- ovcv <c 

r. 


l 

«! 

<c 

r. 

• • • • 

^jtat 

1 

• . e • a • 

4» r IN. «v jcr 

: * 

• . 

CVnC 

1 

• ® • • • • • • 

cv ir «rii 

• •( 
o. 

Cl 

1! 

• 

• 

sl 

r 

1 

• 

1 


< •- air- 

CO O Cl. o !« 

a 

c<aV 

1*3 

r 

*i 

a 

cv 

¥ 



• •••••..a. 
IV NMT » Ar a 

T 

: i ! 

a a 

tr. ca 

i 

• ••••to 

**■ •-* Oi )t * 

t 

• 

• 

« 

iT 

71 

•> 

• 


1 

a if o a 

aft « '•olft 

<V If 

i 

cr if ir. c pone 

a- C 

r- 

a 

j 

c 

¥'. 

• • « © 

• • • » ^ • 

• • 

a • a • • . a 

• « 

• 

• 

« 



s ** i s 

1 

«- 1 f A Ml 

1 M 1 »• 

1 

— cv 

1 — 

1 

1 A A - » 1 
(IIS 

•fc! 

i 

y 

1 


v£ 

A 

a* 

t 


CV 

C C C C 

i 

1 

e c c c ©>»*' 

1 

c c 

1 

•^ C O O ^ (V 

CIV, 

c 

- 


'I 

1 

IV 

- 

c c c c 

C C C C C a 

1 

c c 

1 

«\ c e c — — 

C IT 

• 

j 


- 

1 

•-* 

1 

1 

1 

cv 

c 

c c c c 
till 

e. e c cow: 

• ••«•• 

c c 

1 1 

C C o: C C C«- 
1 1 9 1 1 1 I 

c *\ 

1 1 

7 

a 

<v. 

•»! 

¥ 


I 



9 

» 

• •» 

• 

• 

• 

• 

• *.»«« 

• 

«... 


• 

• 

• 


o 

c 

o c 

c 

c 

c 

c 

C a- O C IV C 

o 

C a. a- CV 

c e 

o 

C\. 

c 

VI 

0 

1 

1 

1 1 

1 

1 

1 

1 

III 1.1 1 

• 

.1111 

1 

i 


•» 




IT. C 3- 3 a. 0 A-XCC 


^ V v0 

•o 


c 

vC 

«s 

a- a 

IT ¥ 

^ vC If 



V* 

K* 






cc 


r 



(T O 

3 

a 

* 

O A- 

A- 

c 


© cv r> a- 

a 

¥. a 

a *r 

oh a 

IV 

IV 

n 

kf 

r- 


9~ 



V* 



a 

if! 


¥ 

a vT 

IT 


v» 

¥ 















¥. 

« 

i 

¥. 


o o 

o 

o 

o 

o o 

o 

o 

© 

© o © o 

o 

o © 

c c 

O © 


© 

AM 

O 














1 


1 

1 




in c aa ichAOAca 

IT A~ 

a ir « 

a ¥. a. A- 

a 

a 

CA 

CC 

Z> 

V a. K1 

If) 

lO 

a* <0 if) 

(O 



in 






fT 

« 


¥'. 















5 

0 

a a 

« © A* 

A* 

© A» © IV 

3 

7 

u 

3 
A 

4 
3 

a. A- 

m 

a 

© 

<r 

& 



•H 


m 

if) o >o 

If) 

m 


v4 

m 






l 



»o 

* 


m 


o o 

© © 

0. 

0. 

0. 

O 

0. . 
0. 

0. 

0. 

0. 

0. 

0. 

0. 

0. 

0. 

1. 

© o 

m 

v4 


o 

¥) 









i 

1 

l 



if © a a «t o A- 

A- © «C © Cl) 

m a- 

a m o 

a a ■-, ,c 

a 


0 

ac 

V 

H H 

¥) 

/> 

m 

-• f) if) 

•o 

vt 


m 







m 



m 



iflOf J ®OAAO tod 

m a* a m to a >n 


H 

if) 

Cl) 

X 

aH 


if. 

m 

m 



K"> 





■n 

X 


-n 


U» 


: 






n 

-J 


a 

01 

3 


♦- 








o 

AM 

u 

O M 

UJ 01 

A- 

* 

z 


A- 






□c 


gc 

Z 3 

X UJ 

< 


UJ 


z 

Ui, 





a. 

X 

d 

— Lfl O 

3 1/1 If! 

y 


X 


UJ 

o 




•J\ 


UJ 

K 

X UJ UJ 

A- 3 Z 

01 

A- 

X 


£ 

a 




Z A- 

-i 

tx. 

►u 

in 3 

woo 

UJ 

> 01 

o 


•y 

5 


UJ 


o o 

-i 


Z 

— u a 

< X a. 


O U! 

3 


O 

Uu 


or 


— - 

V 

o 

CC 

3 l •-« QC 

U. UJ *~ 

. 

© o 

a 


3 



3. 


i- X 

Z 

to/ 


X 2) x X | 

X X < X 

X 

x> 

X 

z 

a 1 

er 


a- 


u o 


►*- 

u. 

3 3 a ui a 

z < ou 

1 01 

z o 

UI 

o 

X 

o 

*~ 

-J 


d a 

UJ 


1 

a. « u > y> 

< B a» m 

t/) UJ 

«« Ik 


au 

V 

CD 

X 


o 

a a 

•J 

U 

a 

1 u Z X 

X 1 Z a- 

z u 

yt 

3 

a- 

< 

y 

U 

z 

*- 

a. 

•-4 

UJ 

A « at a l/l 

01 3 a. UJ 

M a« 

3 Q 

*s 

« 



l/) v 

Hl/lO 

A* 

X 

El 

Z X X O 1 

U Z X 3 O 

1 > 

at l*J 

A- 

3 



— v 

X 

z 

z o 

X 

2D 

X 

alliUAX 

1/1 < X at < 

Z X 

> X 

o 

3 

• 

• 

c 

o 

a 

c c 

UJ 

< 

3 

a X 1 < O a. 

-t X O 1- X ►< w 

at X 

*- 

X 

> 

> 

-V 

< 

X 

u u. 

1- 

UL 

-1 

X 3 X X < 

IA03AU.OI 

U « 


« 


M 













a 

u 

u 


260 


UI 4 FMPLOTMFNT HATE 3.6 2 .f> 2.9 2.7 













BUDGET B BUDGET C BUDGET E PTP^T nTFCFOENC r< S ntFFgpFNCFS AF A 

LOw *bo.4 BILLION MPO **7.f, HTLLIPN HTC-H *q^.« RTILTOM PF»CFNT OF POL . *i 

l.NCO'*-' CO M H f'lFt- UMCOMP COMP DJFF UNCOMp (“OMP PTFF (1-7) (?-«) (*-«>_ U- 7 ) <_?-«) (> 


ACDA/E-156 


• i 


m 

o 

r tv 

c. 

n e r. 

CL 

«. (V 

If ft 

CL 

•O 0 -It. 

c — 

Wr <\l W 

3! 

»r 




• iV 

• 

• • • 

» 


• 

• 

0 

• 

• • 

to to 

• • 

• « 

to. 

* 

• 

• 

eft 

•- 

•- 

1 IV 

(ft, 

4 IT «v 

ft 

V 

tv if 

•- 



tv a 

r 


o 

9 

i, 

tv 








, •*' 


tv 

t 






tv 



I 

j 








1 i 


1 







s i 





If 

« a 

If 

arc 


1 

c 1 r 


If 

a 

if 

— «f 

if tv 

H 

»r 

c 

1 

IT 


If 

c 




















• 


IV 

• ^ 

AIT dXvr 

<i r. 

tr. 

tv 



tv w. 

a 


r- 

i 

i 

K' 

, 







** 


ftT *1 






#T« 

i 








< 


1 



i 




• 






r 

<v o 

K 

»- tf if 

ir 

a a 

c 

J 

o 

a. 

c* cv 

Cv c 

tv 

«v c 

a 

tr-* 

1 

If 

•ft 

r 


















• 


• 

3 ( 

• 

1 C' 

r. 

tv c. 

•ft 

ft 

4 

CV 

K,tv 

•ft *ft 


1 

ft 

a 

i 





• 


1 I 

t 

1 tv 

1 


1 

» 

1 1 

1 1 

e 


*d 

i 










1 


» 







l‘ 



1 


«\ 


C K" 

B T 

— a C 

tv 

— o 



if 


c c 

CJ6 

«r— 

a 


c 

(«• 

tr 

m~ 


1 




K 



I 



V- 



•*■ 


t\ 

1 








i 


i 



. 




» 

• 

1 





c a 

tv 

— If — 

tv 

r- 



r- 


c c 

tv tt- 

a 



sC 

a 


•-* 



1 




m 



i 




tv 


cv 


tv 

1 








i 


* 







1 

i 

1 


• 

c 

c 

c 

C 

c c c 

<\ 

tv ft 

c 

a 

•— 


m— *r- 

a tv 

ft- 

4“4 

•ft 

tv 

a 

c 

0 

•- 

i 

1 i 

t 

1 1 t 

t 

! 3 

• 


Cv 

1 

1 1 

i l 

« 

i 

c. 


• 

tv 








! 


• 

i 






1 

l 





«►« 

C 3 

«*- 

J — 

r 

tv ft- 

•— 

<r— 

0 

in 

*-4 tft-i 

ft* ft 

tv 


c: 

•-t 

«C 

4. 

if 

0 

i 

1 1 

i 

1 I « 

» 

I t 

• 

i 

6 

t 

i > 

— » 

tv 

i 


CL 


a 














1 

« 



i 






~ a. k> 

a ft- 

a ft- 

CL 

vC 

ct 

a 


n 


a o 

^■v 

0 

ft- 

o 

tvi 

*r 

«c 

CO 

a 

in 

<r 

*ft a 

a — 

ft- — 

4 

0 

if 

CV 

1? 

«> 


K CV 

0 



ft- 

ft- 

c 

0 

c 

if 

ft 


«r- 





Cv 








if 

a 


c 

tv 


c 

tr 


















K 

ft- 


r. 




^ cc 

<0 « 

tv tt 

-< co if 

IT If 

e 

If O C 


o 

•-* cv 

a 

o 


a 

ft- 

r- 

*ft a 

a — 

a — 

ft- 0 vf 

CV if 

<v 

«~i K~ c 

if 

(ft 

tv ft 

a 

c 

tv 

a 

• 


•» 



tv 


K 

—« l 

mm 

if 


c 

tv 


c* 












1 

ft- 

ft- 


ft- 



•c 


OOOOOOOCO—tOO — CCyc-<»iJNJOO CO <P O' ft 

I I t 



— a a 

tc CC CC 

C 

r <t if 

k> 

vC 

3 O' O 

s£ 

C if. 

tv 

«c 

if! 

r 

If 

in a 


r 

Cft cv tv 

a 

o 

•* *o tv 

oif m 

tv if 

CT 

ft- 

o 

if 





tv 


tr. 

•- 

if •- if 

a 

P 

tv 

**1 

c 











tv 

ft 


K. 



•" C ^ h (f 

tv tr 

c ft- 

tc if) fO if 

<r> O' a 

O if. 

a 

o tr 

«n 

CV 

a 

ft 

a 

ft-> a vC — 

ct) ^ 

ft O' 

MW JO 

•* to tv 

o r> 

ft? 

tv if 

to 

CO 

*H 

if 





rv tr 

ft-1 

S' 

if 


rft 

tv 

ft-* 

o 










tv 

ft 


m 









C> O «V ^ o Oj U u L/ J) *^1->*W* a. O > i^-ft-4^ 

to . 

ft-» 

ML/ 

• - / 

K) 


m 

m< 

m 

i 




i 

i 




— i ft 

a cc 

3 C 

— ft 

m* 

f e- 


ft/ o 

o 

a oc 

♦-* 

o 


o 


if 

(V 

m * 

0 

-o -« 

ft T 

V 

rv a 

o 

—« *o 

fj 

O if) 

a 

cv in 

X) 

ft 

3 

n 

m* 



cv 


tr 

mH 


if) m-% 

in 

a 

O' 

cv 


o 













tv 

ft 


in 



(O O 

ft X cv X 

C3 0 X 

f) O' 

O' 

fit: 

a f) 

tv 

3 -1 

tv 

ft* 

C\J 

CO 


m a 

\£ H CC H 

X O' -H 

tv m 

o 

h n cv 

O' if 

in 

tv in 

m 

X 

a 

if 


—4 


1 cv 


<v 

ft* 

jr ^ 

if) 

a 

O' 

cv 

ft* 

o 










tv 

ft 


m 


a 


in 


-a 

a 








Uj 













_l 




a 

m 







o 

ft! UJ 

O 



I-. 

u 

i/1 






tr 

ft or 

z 



D 

or 

UJ 






a 

x ~ 

ft. 



if. O 

z> 

if 







uj r 

X 

1 


UJ UJ 

ft 





7 

H- 

_i 

►- ft. 

if 

i 


-1 

VJ 

o 


uj 


6 

U 


z 

ft. 



u a 

« 

X 


•X 


M 



O X 

-J 



ft. X 

X 

UJ 





c 

2 

UJ ft 

J. 

\S) 


X 1 

~ 

X 


ft- 


o 

o 


r Ul 

ft 

jitua 

z 

< 

>- 

_J 


3 

or uj 

< 1 

X 

«x 

w 

> ft* 

« 

« 

X 


vD 


X 

-J 

-> X 

1 

u 

2 

I 

X 

I 

r— 

u 


►- 



ft. ftj 

ft 

ft. 

M* 

a in 


tf 



ft-4 

cr 

d. 

►- 

X H) 

z 

X 

X 

O 1 

u 

z 

D X 


r; 

o 

X 

31 X 

0 ^ 

iiJ <-) ft X 

if) 

< 



ft. O 

o uj 

< D 

X I 

4 

o 

ft 

X 

*0 

< 

T U 

U. 

fc— 

U -J 

X 

ftk X 

X < 

X 

ft 


u 


ft 




ft 


z 


ft 


«t 


UJ 


z 

UJ 

l/v ft 


X 


UJ 

u 

Z \A 

. 9 - 1 

>- 


X 

X 

O UJ 

> if 

o 


ft' 

o 

ft 

O UJ! 

_l 


o 

X 

ft- • 

15 O 

X 


-J 


<' if X 

X 

X 

z 

X 

X 

U UJ 1 

If) z o 

UJ 

o 

X 

o 

►-« -ft ify < ii 


ft 

UJ 

CD 

Z ft z 

o *- 

_J 

ft 

2 

4 

Oift UJ ft 

-JO 

<. 

«t 

X) 

-J 

X'-j a i 

> ft UJ 

ft 

-J 



X ft < z 

X > X 

o 


• 

• 

Olft X ft 

UJ ft X| 

ft 

a 

> 

> 

U O ft U. 

J) u» <’ 


o 




1 


X 

u 

o 


261 


unemployment rate 
















NPta Mrvico TABLE 15 (continued) 


ACDA/E-156 


* H 

• : 

v »lf 

* £~ 
v t 

u «* 

b- L. « 
2 C.l, 
it ft. 1 

O - 

UJ 2 

b it 
U- b — 
'-HI' 
C b. I 

a ~ 


If. 

b 

b 

2 

b. 

a 

b 

u 

u 


1/ 

o 


c 

I 

if 


«£ 

I 

ft 


ft 

t 


b 
2 b 
C — 
— C 

ui — 

►ft 

H £T 

g o. 

3 *C 
« OT) G 

e 

* 

i a 
e s 
_c 
X <J 


u 
u 
z — 
c c 

-J 
u ~ 

“ *o 
© ^ 
ft 

¥ 

a 
o x 
u. c 

s u 

2 


u. 

u. 
z — 

CCj 


M 


' “Yt 

Wll I 
3 o 


£ 
u •*_» 
ta g 

n 

¥> 

a. 

* s 

o o 

_Jb> 

z 



r ii *.«. a % 

ft (ft 

«. ft «. 

«- If. ft e 

r. 

»• f* tv 

sv «c 

a 

3 


O 

IT 











8 

' • 


ft ft ft - *<- r. 

ft ft 

a ft a r 



ft. r <r 

o, 



1 



s 


« 

«- » 




CVj 


t 

• 






1 










o c c r « ft 

ft ft O V 3 

C ft 

ft d,«f 

ft f- C 

r c 

c 


O 

c 

9 

• ••••• 

• • 

• » G- 

• ft 

• «< 

« 

• • • 

•r? 

• 

• 

• 

• 


ft) a ^ ft s s 

ft ft 

IT ft 

ft a 

—j 


ft. 3 (ft 

*— 


1 

e— 


♦ l 


' » 

ftil 




» r 1 

s 

» 






» 




1' 



| 

; 



r. • e.»- ft if 

ft 0 

ft - C 

0 If 

3 a 

c 

ft If ft 

ft c 

« 

a 

fri 

c 














w~ 

1 K 1 1 - 1 

ft- ^ 

<\ ^ 

ft or 

f. ft 

ft 

ft | ft 

1 t- 


if 

c 

•» 


1 1 

1 4 

i i e 

a « 

9 1 

i 

i e 

r 

« 

9 


1 




• 




» 



♦ 

• 


ft 

c ^ ^ c c c 

c c 

c — c 

c 

c e 

c 

— — r 

© o • 

© 


© 

r 

•- 

1 


i 

1 ! 




« 

9 

*1 

i 



e «- — c c e 

c c 

c — c 

*- c 

c c 

c 

* — r 

C (V. 


C 

c 

a 

•» 

« 


( 

1 1 




«»- 

1 

n. 

« 









( 


• i 

• 

• 


C 

C ft c c c c 

c c 

c — c 

ft- ft- 

c c 

c 

•- c ^ 

C (\ 

C 

•— 

1 r '. 

* 


? 1 1 « 1 I 

1 8 

9 1 9 

1 1 

I e 

1 

( 9 t 

» ft 

«P— 



i 









! 

1 

1 




c «- * • c c: e 

C C 

GOG 

c o 

c c 

c 

ft ft IT 

C C. 

a 

IT 

3 

if. 

o 

I 1 1 i 1 1 

1 1 

1 1 1 

I s 

1 9 

! 

• 1 1 

1 

i 

S 


i 


C H */: C «M 

ft) If 

C ft C 

3 ~ 

If If 

a 

» f c 

QD 

r- 

© 

•ft 

c 

a 

ft ft 



ft- 

ft— 


if «- or 

k a 

o 



e 











0 - 

















O' fti ft if c <— 

ft If. 

Cite 

cr *■* 

eft DO 

cy 

© -C ift 

« <- 

IT 

o 

X 

n 

ft 

ft. ft 


•* 

ft— 

ft- 


f ft I 

a .1 

c 

« 


c 










3 

w-t 


•r 











** 




<3 © e o o © 

C G 

o o o 

o © 

© C 

c 

© © © 

© © 


l*> 

•ft 

•• 

i£ 



1 

« 










O ft lf C —• 

ft If. 

C If. o 

ft c 

Ift if 

ZJ 

<C X (V) 

C£ •-< 

«-< 

e 

•ft 


if) 

ft) ft) 


•M 

•ft 

ftM 


IT ft « 

cc 

O 

© 

K> 

a 










pr_ 



*■ 















a - w it c - 

ft If. 

e n e 

ft c 

ift if 

3 

if i W 

ec 

c 


•ft 

cv 

» 

ft) ft) 


«*4 

•«* 

(ft 


If) ft © 

® -0 

O' 



o 











•— 

















O © O © © G 

r> c. 

O O O 

o o 

o o 

o 

H O «H 

o o 


« 

O 

IO 

ift 











I 



C —< ft ft c — 

ft a- 

O X O 

If © 

ft if 


.£ r- k 

© o 

0 

© 

•ft 

3 

■v 

f'J ft) 


•ft 

-4 

ftM 


n ft © 

® f\> 


n 

o 

y 










K-. 

rft 


K) 


O' O ft) .“1 o 

ft) *r. 

oil o 

fn o 

io in 

a 

S i a CM 

© O' 

© 

X) 

•ft 

•ft 

•ft 

ft) ft) 


•ft 

ftM 

ftM 


in •-■ x 

© CD 

« 

rt 

Ki 

a 


O' 

ft 


(ft -4 


x •— 


i- 

v _l 
x 3 
»- u 

i/i •— i 

a. 

=1 J 

z « 




3 

•J 




X 

ifl 




UJ 



»— 






O 


UJ o 




UJ 

in 






z 


H- 




o 

>- 

rr z 



o 

X 

b) 



< 



Uj 


Z 

Ui 



a 

* 

3 


if 

o 

3 

If. 

a. 


h- 



X 


X 

U 


if, 


Jj 

i- X 


b) 

U) 

»— 

— 

*» 


wn 


*- 

>- 


X 

X 

z 

►- 

_j 

t- 

— m 


-J 



5 

o 


UJ 


> in 

o 


>• 

o 

c 

o 

_i 


2 — 


u 

a 

« 

i 

•ft 




o UJ 

_) 


o 

X 

*-• 


bft 

a 

X _» 



X 

u 

UJ 

•- 


• 


i£ U 

K 




H* 


S 

U) 

X X 

if >- 

X 

i 

' 

X 

ft O' 


<x 


X 

X 

•» 

•" 

X 

X 

o 

o 


u* 

u. D _i a 

U) 

a 

z 

ft 

O UJ 


l 

iA 

z o 

UJ 

o 

X 

o 

3 

fr 

bJ 

ft 

t a 

ft UJ 

> 

—« 

< 

» 



•n uj 

ft u. 


•— 

UJ 

X 

2 

a 

■J 

u 

a e 

o z 


z 

X 

1 

Z 1- 


z u 

4*4 

-J 

►- 

z 

ft 

>— 



"ft 

u — 

•—! M 

X 

i/i 


f) 

3 « 

b) 

•ft 

tft 

_i a 

ft 

ft 

3' 




b~ 

X 

Si Z 

X z 

o 

i 

u 

z 

T JO 

i 

> 

— UJ 

r- 

-J 



z 

o 

** 

CD 

X i- 

Ui u ♦- 

X 

l/i 

ft 

X -« 

ft 2 X 

> X 

o 

3 

• 

• 

o 

o 

Jj 

ft 

3 X 

I ft 

o 

■» 

•M 

X 

o *- 

X 

•ft 

aJ 

—• X 

»- 

a 

> 

> 

u 

u. 

— 

u. 

J X 

u x 

X 

ft 

X 

>- 

a 3 ►* 

u. 


J ft 


o 

•ft 


















a 

U 

o 


262 


UNEMPLOYMENT hate 8»0 7 . Q 7,8 
















N r si YORK TABLE 15 (continued) 


ACDA/E-156 


« ir «. 
i 

IT • If 

" c ~ 

If C 

u ®~ 
uu «r 
2 Ol 
u cv 

HI— 
UJ Z 

u u 


I 

— IT. 


C_ 



K 

— c 

q 

c 

IT 

If 

If 

3 K- 

r- r- 

a 

vt *• 

0 

c 

w 

a 

¥ 

r^- 

CC 


aj 

0 


a 

a 

c 

¥~ 0. 


CV 

C 

if 

0 

0 «i 

* ^ 

0 

c e 

if 

¥ 

c 

0 

\T 

1 r 

c 

a 

u 

ir 

<c 

z 



K 



¥' 


•- 

3 


r- 

c\ — 


3 

If 

a 

(V 


c 

a 

f\J 


• 

c 
















*- 

0 - 



(X 


a 


(- 

u] 


m r u 
c 

tf 

i a 
c. : 
►- c 
X O 
7 




' t 

c ^ r j c ic c «r c c 

• * *1 * ^ • • • » • ^ ••• 
A b> A <v a If «v CV Ic MS I r*-(^«r 


cv «c‘ 

• u 

e 

A 

I 

I 

I 

if co >c if if c 30 cKr^i«’ir»-ififfvr'-rc 


— m 

9 ( 


if! 


o — i 


— CVCVCViCVlf'-fCVf' 

►l , 


, f- fl <f •- ®~ — CV If. 3 f*- 

, — »• tr 

I I I 


O^ 

II 


s«rsc(»fcs<r<iocsif. ware 


u 



¥ 























*- 0 

r~ 


* 

If 


1 - 

| 

C\ 

r 

cv 

r- 

♦- c 

if 

<\ ¥~ 

<\ 




1 






c u 

1 



1 

1 

1 


1 

1 

1 


1 3 

1 

1 1 

l 

• 

9 

1 

f 

1 


K» 



a 











J 

1 



1 






*e- 






















■ ■ 


i/ 



(V. 


c 

a 

K •- 


€\ 

s. 

v . 

X 

CV c 

|£ 

c\ 

•— 

c. 


cv 

PC 

ri 

if 

3 


if 

u 


CC 



1 







3 

(\ 

c 




CV if 


' 

r- 


¥ 

If 

c 


i 










1 

1 








1 



1. 


2 


If 




















U_' 


























Q 


























U. 

























• 

u 




K) 


C 

^ Cu 


cv t' 


if 

<V If 

c 

«T“ 




a 

p<^ 

if 

r 

9- 


a* 

u. 


a: 

•—< 


» 



<v 




if 

(M 

* 



r 

c\ 

h- 


•H' 

0 

<c 


if 

►- 


1 










1 

1 








1 



1 


c 


c 














































1 


1 - 


























If. 


























or 



c 

c 

cv 


«■-» *-< 


<\ 

s. 

cv. 

a 

- a 

a 

0 K 

— 

0 

if 

K* 

r. 

if, 

0 


a 


*- 


h 

v 

1 

1 

1 

1 1 

1 

1 

1 

1 


1 c 


1 1 

1 

cr- 

1 

c\ 

1 


3 

4 J 

£ 

if 

u. 


• 










1 

1 

1 



• 


1 


j 

<\ 

— 
























1 
































u 


cv 


0 

K" CV, 

If 

¥' 

a 

Ou 

¥) 

cv cv 


r- r 

<\ 

CT 

¥ 

c 


C 

p r 

-f 

r*v 

0 


2 

u 

0 

i 

1 

| 

1 i 

•»* 

1 

1 

1 


I 1 

cv 

1 i 

1 

O 

CV f' 

1 


r 


a 



c 

►- 






i 




! 


1 



1 

1 

1 



c\ 


cv 




c 




















1 





_i 

























UJ 

_ 


















































• 


c 


if) in co f. c o 3 v£> »o a o o c** — •^eoa-coa.r- 
c r r s r — vc e o f^ith-cve—iff^cvirifir 

— * r »- K" CV 3 h- f 3 If >t CV 


3 

a 


if) 

a 

CC 

a 


if> 


O' 

(V 


u 

lL 

2 — 
c c 


© © -u O CJ CV 3 HC|NC 0 N -<00 Jf «-o 


If 

cv 


I 


© 

CO 


p— 


u" 

C, c 

ir 

c 

0 

x — 


a 

0 

r- 

cv 

X c 

c 

0 X 0 

'C 


if. 


if< 

X 

x a 

f; 

0 

Ki 

3 

m 


f) O 

5 

9*4 

vC 

f> 

c 

0 c 


it CV if) 

vT 


® 

»o 


O' 

5 



IT 



K 

cv 


3 



f- 

cv — 


3 If f 

<\ 


0 

0 

cv* 


it c 















r—« 3— 



r- 

a 

1 

a 


• u 

f'- 

if 

V 

a 

O X 

U) C 

5 C 


u 

u. 


c c. 


to 


3 c if. rteff ic 3r^ac^oNOCif3cvif 3 

Ol0l'13l r )HfiO(J'Hf;j1OrOvCJ!(\lJf)3 
Wj CV 3 P~ CV •- j If f (V 


•i O 3 -® «-» 


•H 3 H »£ « (t (O «-t « ^ C. CD <V O 

H H H fO 


0 

X 

cv 

X 

X 

St 

cv 

m 

® 

• 

O' 

t- 

c 

a 

9*4 

cv 

CL 

cv 

0 

0 

f. 

fO 


0 

3 

cC 

• 

cv 



£« _J 


w 


L> 

CQ 


X 0. 

5 

3 O 
• O 

c 

St 

tfi 

0. 

* z 

o o 

3 o 
2 


M 


ir 

0 X 

Cf 

CT 

a 

cv 3 

a 

0 " 

0 

X 0 

c 

X 

CV X 

it. 

9*% 

3-. 

r- 

X 

X. 


•0 


rO 

AJ 

O O O' 

0 

S> if) 

X 

O' 0 

|£> 

r«- 

■0 0 

X) 3 

O 

r- 

0 

0 

• 


10 

3^ 


ro 

cv 

3 


X 

cv — 


3 

if X 

CV 

c 

c 

CsJ 

cv 














H 

^4 

CC 



® 



-J- 

0 3 

10 

0 r- 

x * 

3 CV X —> 

CV 

f> X O' O' 

CV X 

^ H 

>o 

*-4 

10 


X 

O 

K~> !<■. 



X O' 

00 xx 

® 

3 O X X. 

CV K) 

IP 

O' 

fO 

0 

® 

• 

H 

■o 


«o 

•-M 

3 

0 

M 3 

if) f5 



0 

cv 

H 

■0 









•H 

»M 

1^ 



X 








r> 

UJ 

J 



1 

if 




a 



9- 

1 








0 

94 

UJ ® 


M 

UJ 

If 



t~ 


1 

2 


*—■ 







X 


a z 



X 

UJ 



< 


1 

UJ 



UJ 






X 

K 

* ►-! 


if O 


St If 



t— 



z 


UJ 1 

0 





if 


UJ 

t~ X 


U.' UJ 

p- 

— ' “T 



if 


t~ 

>- 


z 

X 




z 

►—» 

_J ►- 

—1 yi 


_) 

u 

0 0 



UJ 


> If 

0 


V 

0 


UJ 


0 

U 

_l 


z - 


0 a 

< 

I - 





O UJ 

_J 


0 

lL 


X 


►-* 



Q 

(X -J 


•- X 

u. 

u »- 



• 


0 0 

a. 


3 





p- 


i 

UJ 

X X if 

>- 

X 1 


X < 

If 


X 


X 

z 


1 

X 




U 

O 


)- 

U. X) _) 

X 

uj a 

2 

c 0 

UJ 


9 

if 

2 O 

UJ 

O 

Z 

0 

>- 

-1 


o a 

UJ 

< 

i a « 

UJ 

> —• 

< 

8 -u, 

f-4 


If UJ 

« U 



u 

X 

'X 

D 

0 



J 

u 

x 1 0 

2 

X 

J 

1 z 

>- 


z 

0 

»—« 

3 

»- 

Z 

< 

►- 

u 

2 V- 


M 

Jl 

UJ )“ "™* 

I--I 

a if 


if 3' 


UJ 


M 

J Oi 

< 

< 

X! 

3 

s/J 

9-4 

*-4 

if 0 

►- 

X 

X z * 

X 

0 1 

u 

2 X 

J 0 

9 

> 

»* UJ 

►- 

3 




7 

Z 

z 

0 

X X) 

1 *-1 UJ 

O 

)- X 

1/) 

3 Z 

9*4 


Z X 

> X 

O 

X) 

• 

• 


O 


0 

0 

u> 

A 

X, X X 


0 — 


X 0 


X 

►M 

Ul 

-1 X 

4 " 

a 

> 

> 


<* 

z 

0 

it 


u. 

3 10 

t 

* < 

X 

I— 0 


JL 

f 0 < 


0 

*— 1 

“4 



















1 

u 

u 


263 


UNEMPLOYMENT rate 
















NORTH CAROLINA TABLE 15 (continued) 


ACDA/E-156 


i 

» 

I 


t 



• 





7 



• 



1 







tv 

• tv o 

c 

c to 

to X to. 

x c 

r 

©XX 

tv x. 

X 

tv 

tv 

tv 


to 

• 

• • 

• 

• 

• • 

• • • 

• • 

• 

• • 


• 

• * • 

• to 

• • 

• 

•» 

• 

« r« 


tv 

1 #V| 


r 

« tv 

tv e 

r to 



*0- 

•» 

tv r. x 

C 



• 


1 







i 







tv ■ 



«rt. 


v »»r 








1 



1 



<i 



• < 


IT c 


« 

to to 

to 

r 

— c 

to cV 

c tv 

tv 

X 

tv’ 

X 

X « a 

to c 


fl 

•> 

a> 

k •*. 

• 

• 

• • 

• 

• 

• • 

• « • 

• • 

• 

• 

• 

• 

• • • 

• • 

• 

♦ 

♦ 

• 


•• 

tv 

1 tv tv 

to IT to 


tv, 3 




to* 

tv a a 

r- 



9 

Art 







; to 

tv 






to 



V- 


u tv 
a v ~ 
kJ 7 







i 

1 






1 . 

i 

* c : 



». 

« 


u w. 


to 

to c 

*» 

c 

- X 

to a a 

a to. 

tv X X- 

c 

c X 


X 

tv’ 

»- 

It V. 

to 

• 

• • 

• 

• 

• • 

0 0 0 

• • 

• 

• 

• 

• 

• * • 

• • 

• 

• 

* 

• 

► o r- 


1 

to 1 

1 


1 to 

tv «- to 

I c 

tv 

tv 

tv 

c 

- I » 

i f- 

* 


c 

rt 

C k 1 



1 


1 

1 

1 1 - 

fl 

1 

1 

i 

• 

t 

to 

• 


o 


& •• 







t 

• 






• 



1 
















\ 





sr - 


tv. 

c tv 


* to <\ 

-c ^ 

c — 

c 

c 

c 

c 

X to Cl 

— 3 

tv 

c 

c 

X 

k « 



« 




1 

1 





to- 

tv 




tv 

L 1 














t 



1 


2 rf 

















* 


k- — 

a 

U 

to - 

to- 

to 

c to- 


« 

o tv 

- c c 

c tv 

c 

c 

c 

c 

« a a 

- c 

X 

•— 

f 

I 

a 

e 

to c 

«rt 


1 




1 

t 





to* 

tv. 

•• 

«rt 


r 

► 1 

C f. 














1 



1 


a* 



















to 

Cl 

O' ' 

c 

c 

c — 

C 

<v 

C to 

c c — 

C <\ 

r 


C 

e 

to «- tv 

C C 

c 

o 

X: 

► 

-■ c- 

to 

t 

9 1 

1 

1 

1 I 

1 1 - 

i 3 

i 

1 

» 

I 

1 1 1 

1 c 

X 

c. 

X: 


to 1 







1 







1 

1 




rt» 



















W 



















to 


<v 

e r. 

^_ r 

to 

X to 

— c tv 

c c 

tv 

•»* 

G 

C 

a to tv 

tN- c 

to 


3- 


2 to 

C 

« 

i * 

1 

1 

• i 

I 1 1 

1 < 

I 

1 

i 

i 

• l - 

1 • 

X 

1 

X 


C-> 













« 


1 




*-c 



















-J 



















M - 



















. •- 



















ur® 


tv 

to to 

X 

c 

to C 

a x •— 

X a. 

(VI c 

X 

to* 

c x a 

3 to 

r 

3 

rr 

X- 

C3 0 

5*1 

c 

c 

c~ 


r- 

X to 

- rv a 


c 

X 

*- 

to- 

C X — 

X C 

c 

c 

3 

3 



•to 


•to 

to- 



•to 




K 

fv •» 

c 

X 


C 

U * c 
« r © 















tv 

X 


tv 

e 



















to 



















z a 


to 

to to 

to 

O 0 m « to K> 

X <C 

X 


X 

to* 

X ® o 

3 to 

X 

X. 

© 

X 

e i 


e 

e 

•r 

* 

X ff 

-AC 


c 

\r 

to* 

to- 

— C to. 

X © 

tv 

© 

r. 

« 

-- c 



•* 



to- 








tv — 

m* 

X 


c 

z CJ 















tv 

X 


tv 

7 






































to 


c 

D © 

o 

•4 

toA O 

O O G 

© © 

© 

o 

© 

O 

©»-» 

o o 

3 

t- 

x> 

CJ 

to 

X 







• 








1 

1 

1 

7 — 



















OC 



















Om 



















-J 



















o — 



















rt» 


1 

to r~ 

to 


c 

on i*' ^ 

X to to. 

G 

X 

to* 

v' C © 

^ a 

/ 

to. 

3 

c 

h c a 

to 

9 

c 

•n « 

X to 

— tv to 


© 

X) 

to* 

to* 

—t X tvt 

X f- 

e 


r- 

rt* 

o 3 



•* 



to* 



a— 




to to; 

tv 

c 

X 


rt* 

8 *. c 















tv 

X 


tv 

3 »u 
« to 



















* 



















to 



















n 


to 

to x> to 

•c. 

o •* 

(tto i 

X to 

to> © 

X 

to* 

3 « « 

3 3 

o 

X 

c 

tv 

O 1 

to 

9 

3 « 

X X 

— M to 


© X — 

to* 

* © tv « f- 

• ® 

•* 

» 

•rt 

u. c 



•» 


tort 

toto 



•• 




to to, 

tv 

© 

XI 


•* 

2 <3 















tv, 

X 


<VI 

* 



















-> 


















• 

u 


to« 

U rt 

o 

rt*' 

f\j to* 

O O to* 

o o 

o 

© 

o 

o 

to) x 

o o 

o 

u- 

w 

X 

to. 

tot 














CV 

••* 

tv* 

1 

7 *•* 
















1 

1 


CC 



















rt* 



















- i 



















cQ 

toe 


to 

to to 

to 

to 

C\* 

a r- to. 

X x- to. 

© 

X 

to* 

c a tv x to 

G 

X 

O 

X 

H Z 1 

Vt 

> 

T' 

•o -o r* -o 

«-4 rvj 


Q 

l/> -< 

to* 

—* X to 

x> 

■o 

«* 


art 

ui X 



n 


•rt 

•* 



to* 




to to 

CM 

o 

X 


•* 

V »c 















tv* 

x. 


tu 


to 













a 


3 

3 A f- 3 T O 

«C O fVI 

o e <m 

© C -t to r». 


3 to 

N 

3 

0 

•* 

* 3 

•* 

a 

© to x X at 

rt* cv 

o 

X «* ^ X 

<M 

ac t- 


r-. 

a 

t* 

o o 



tort tort art 


*4 

to 

to 

M 

O 

X 


•rt 










tost 

X 


tv 


3 


l 


c 

» 

3 


« 


x 


vu 






o 

to 


X X 


to 



to 








o 

— Ito 

o 

rt* 

X 

V 



2 


to 






X 

*- X 

2 

3 a 

to 

< 



k) 


z 

to 





£L 

K 2 

— 

x c z> 

X 

X to 



1 


u 

o 




X 


u •- 

X 

to to to 


2 X 


to 

V 


X 

<£ 



2 

V- 

to 

— « 

X 

to v> 

6 

O to 


> X 

o 


V 

O 

UJ 


O 


to 

2 

— 

to X * 

I 

rtrt 


Q to 

J 


o 

U. 

X 


rtrt 

to 

art 

c X 

to 

— Xu. 

to 

rt* • 


o u 

a 


to 




Pto 

c 

1 

(C — 

XXV 

z • 3 

X 

< ✓ ar 


X 

X 

» 

z 

X 



KJ 

o 


*- U. 

3 to X 

to a z 

« 

a u l 

X 

z o 

to 

o 

2 

o 

>- w 


r> 

X 

kl < l 

a « ui 

> — < 

a 

— — X to * tot 


— 

to 

EC 

x - 

O X 

i 

-J 

to X 

1 to z 

Z X 

3 

2 to 2 

u 

— 

to 

to 

2 

* 

— u 

2 


tort 

— ’to 

— 

X X 

X 

X •— to toi 

— 

to c 

* 

* 

3 

to 

X —> 

rt* 

X c 

rt- 

X 11 

2 X Z 

O 1 to 

z 

* to O 1 

> 

— to 

to 

to 



D X 

2 2 

o 

M X Z 

M to to 

to X X 

* 

* — « 2 X 

> X 

o 

z> 

• 

. 

— • 
-to 'to 


o 

c 

u. 

* z 

XI* 

o — — 

X 

O to JC —to 

to X 

to 

X 

> 

> 

/ 4 

% 

to 

4. 

— 

A to 

1 to X 

X * X 

V 

■J 3 to to 

XU* 


o 

•rt 

— 














X 

u 

u 


264 


UUE*PL0T*FNT KATE 4.f> 3.5 3,8 


















NOPTH DAKOTA TA3LE 15 (continued) 


ACDA/E -156 





t <£ r. a 

A Atr N 

'a 

ct 

c 


«o|r. 


«. 

N 

Oj 

c 

r 

tt 

0.1 

tv 

«r ir 


if> 













«* 

» • 

«c‘ 


A 

cv •- 

a a o_ o. 

; » 

o 

»*■ 

tl 


o 

IT 

*o 


tr 



C' 


• 1 

kt • ** 


1 


• 

t 

1 

1 


<v 

1 


1 

1 





o. 
i. 



1. 



44 

















c 



1 







1 





1 





v c 



«£ a 

Cl r 

roc o o 

1 IT 

a 

r 

r 

if o u 

•z 

e 

r. 

c 

-£ 


nI 

IT 

u 



• • 

• • 

• • • • « 

• 

• 

• 

• 

• • • 

• 

• 

• 

• 

• 

• 

• 

• 

• 

v t 

«r 


CM 

OJ <\ 

ir ir a r 

t 


c 

i 

•* 

o 

a 

a 


N 

•-a 


o 

a** 

7 C 

1 







CV 







r 





u 

Oj 



t 




1 


1 





I, 



1 


a n 
UJ 2 



1 

I 

• 1 

1 



1 





! 





1 

U. U. 



a N 

c r 

<o C »© — Ol c 

o 

If 

>r 

rr o 

r. 

c 

o 


c 

«£ 

r 

r 1 

N 

u. c 


K* 














• 

• 

• 


►- Q 

N 

•- 

» o 

-t • 

(V (V C\ 


•r- 

c 

¥ 

r o •- 


i 

i 

1 

r 



r 


C U 

1 


, ! 

l 

« t i i i 

1 

» 

r. 

t 

« i i 

i 




r., 

1 


CV 


0. 

»-« 






i 





»• 


! 


a 


Oj 

— C 

c c 

o c c c c 

C. 

c 

c 

C 

c c c 


c 

o 

C 


r 



r. 

u 

a 

a-> 




1 


i 

i 






i 



• 


CJ 

i 

















2 

X 









| 





i 





UJ 

•W 





1 












i 


a- 




t 

• 

1 














Uj 




















U 

a“ 

•— 

c 

c c 

C C Cl c c 

c 

c 

c 

c 

c c c 


c 

o 

c 

cv 


N 

o 

a 

u 

a 

4^ 




1 


» 

1 






1 



»‘ 


*— 

i 



















c 

o 

















1 


K 






1 














cr 















•1 

• 

• 

•1 

• 

a 


c: 

c c 

c, c 

c_ c c c c 

o c 

c 

o 

c c c 

«»■ 

c 

c 

c 


a 

O 


cv 


N 

a- 

1 1 

1 1 

1 1 1 1 i 

1 

t 

1 

1 

1 1 1 

i 

1 

1 

» 

t 

i 




a 

1 




































U 


c 

c c 

c c c c. o 

G 

c 

c 

c 

G C C 

a-* 

c 

OJ c 

o 

<c 

a 

1 


2. 

c 

0 

1 1 

1 1 

1 1 1 1 1 

1 

1 

1 

» 

1 5 1 

» 

1 

. 1 

1 


. 1 

. i 

• 

. a 

c 





















•- C 


H C 

W c 

g*.? 

s f u 

r 

X 0. 

c z 
*- c 
r o 


C IT C If. GCOrCNCCMCKlMO NO vO 
r •- a a a 


cmciroocfo oi c c w oki cjKi c a cr vC 
a *- — a ♦- a a 


r- 

K' 

o 


>£. 

cr 

<£ 


a 

o 


~V \C 

- tr 


<NJ 

C — 
U 


N 

IT 

o. 


CV 


m 

a 


u 

u 

7 •” 

c c. 


OOOOC.C.OCOOOOOCOOCCOOC •-< *1 


o 

I 


o _ 

H £ n 
g 5 

o «c c 

£ • 

vC 
■f 


V u 

z 

3 


in 


C cT 

a 


o ir 


c.oc to c tv c oocnojir. co-O'in 

a — a a 


c 

a 

cv 


Ol 

O' 

vC 


—, iT 

(V. 


vC 

ir 


c. 


o 

If, C lT O O O IT O 

ojcodjcrojiTO' 

O' 

a in 

c 

a-* 

IT 

CC 

<c 

O X 

a 

to 


^ a 

a 

a • 

a 

O' 


in 

• 

u. c 







OJ 

>c 


Ol 

iT 


u 

u 

2 — 

C C 


tO 


occooooooooooooo»-to-^oo 


04 —• 


OJ «-i 

I 


03 -I 

h e a 

§ ui 2 

a c 
• o 

CQ 0 

s> 

*■ 

a. 

* i 

o o 
_l o 
2 


O lT C. X O O C IT C(\|OONCK-(VK coo a 

a —« —< a —< a a 


O' XI 

K1 


3 XI 3 O O *0 C. 


oj o oogoocvuncr C'O' a 

— a a a 


a 

04 


O' 

tO 

(V 


a 

O' 

<C 


oj 

O' 

£ 


a 

cv 


O' 

IT 

04 


a 

X! 


'J 


X — X — 


>- _J 
X X 
*- u 
m« 
3 a 

X. kS 

z < 





3 

-1 






Ql 

in 




O 

I-* 

u 

o 




•*-4 

Ul 




cr 

H 

* 

z 





a 




a 

X 





in 

O 

* j 



O'. 


UJ 

K- 


• 


Ul 

Ul 

k— 


Z 

N 


h- 

t-t 

in 



_j 


Cl 


c 

u 

_t 


z 




u 

X 

< 




M 



-j 




X 

u 



3 

X 

ll 


X 

V/ 

>* 

X 

1 

. 


Cl 

o 




3 _» 

CC 

Ul 

a 

z 


3 X 

u < 

a 

a « 

* 

> 


< 

o a 

a 

-J 

U 

X 

t 

u, 


X 

X 

£ 




«—• 

uJ 



N-< 

* 

m 


M 

if) c, 

K 

X 

X 

2 X 

X 

o 

i 

u 

A. 

-a 

«» 

o 

X 

:3 

X 

a *4 

UJ 

Cl t- 

X 

in 


vO 

c 

Ui 

4 i 



r 

4 

o 


*■« 

X 

o 

X 

>— 

LL 

3 

X u 

X 

X 

< 

X 


l/) 

u 

in l/l 

3 X 
O O 
I ~ 

Ui H* 

X < X 

< o u 
* <-<,<-1 
I Z H 

XI 3 •- Ul 
21 JO 

4 X *- < 
X O.N 3C 
K- C* 3 *- 


UJ 

►- 




N 

z 


N 


<* 

Ul 


Z 

Ul 

K 

X 


Ul 

c 

m n 

> 


X 

X 

u > in 

o 


>- 

o 

Q UJ 

J 


o 

u 

• <3 u 

a 


A 


a a 

X 

Z 

a 

X 

I in z o 

UJ 

o 

X 

o 

<n uj <r u 


k-< 


X 

Z U" 


H 

I 

< 

h«J 2 

< 

4 

3 

-I 

1 > *-i Ul 

y- 

-J 



2 ac > x 

o 

3 

• 

V 

uj •-> oc, 

y~ 

0 . 

> 

> 

U. i/IO «' 


O 

*-4 

—a 

1 


Q. 

VJ 

U 


265 


UNEMPLOYMENT HATE 






















CMTO TABLE 15 (continued) 


ACDA/E-156 


« »r m. 

8 

X •W 
«S •- 

C 


>-s r cc c 4 i 4 it cr c iO r c c & «- •** «c: •- 

• •• • • 

«\ nnaifAK *-*v4»r «r « 8 

- # » A' » 

I » • 


X 

c 


X 

«f 0 

X 

e k 

C 3 

O a 

X 



«» 


11 

X 


a 

r c 



c 

C* 


U 

1 

4 

• 

• a 

•> 

• • 

• 

• • 

* 

• 

» 

• 

» 

• 

• 

« 

«* 

• « 

• 

•> 

tt 

• 


ir-» 

U e 


tv 

KJ| 

cv 

X X 

f*- 

r 

cr 

X 

tv 


«F> 

v,- 

tv 

8T 

4. 

r 



G 

* 


z 

C 8 







0 - 


f» 







► 






u 

tv 







t 


» 








t 



8 ■ 



a 

^ w 























u, Z 

















t 






u 

U 


X 

X — 

4 

X X 

e a 

O' r- 

4 

* 

c 


e*- 

3 

*r 

CV 

cv 

r c 

0 

4»- 

r 

K 


U- x, —• 

Y 























o ► 

•- 

1 

<\ - 

* 

- « 

Ct A 

tv a 

•» 

0 

r- 

K 

x. 

A 




8 A 

X 


c 



c 

Lt 8 


1 t 


t 

I I 

8 ^ 

8 

a 

8 

8 

I 

8 

8 

8 

1 

K 

1 


X 




a — 







i 


i 








8 



H 




w 























ir 

i 

0 

tv 

f\ 

c 3 


c — 

— K* 

c 

3 


CV 


c 

c 

X 

X r~ 

.- X 

X 

X 

•— 

tv 


it 

a 







K 



V 






cv 

! 




1 


«. 

i 







! 


8 

1 










! 



7 

ur 























U,’ 

w 























a 
























u 
























u 

«*■* 


<\ 

C X 

tv 

c —* 

•- K* 

<r- •— 

4 

X 

X 


c 


tf 

a 

4 

a r 

X 

A. 

4 

CV 


u 

tr 














•-» 


X 

i 


0 * 


( 


►- 

8 







i 


t 

8 










i 



c 

c\ 




* 











































l f 
























a 

©•>■ 

c 

e 

c <\ 

<: 

c e 


•“ >£ 

A 

X 

tv 

4 


*— 

c 

CV 

a 

cv r 

cr 

X 

4 

r 


►— 

a 


l 

i i 

i 

t i 

t i 

t u* 

1 

«-> 

4 

8 

8 

8 

•- 

» 

1 

i i 

X 

a 

X 

•— 


u 

i 







1 


8 

i 




8 






•- 






















J 


•• 




L. 


cv 

C X 

<v 

G —' 

4 

•— G 

4 


0 

3 


•-« 

c 

A- 

G 

tv c 

X 

3 

tv 

X 



i u 

0 

8 

1 t 

1 

t * 

i i 

8 - 

i 

1 


1 

1 

8 

cv 

1 

(<• 

8 

•— 


cv 




c •- 







1 



1 




1 


8 


0- 


«tt- 




— c 


















1 





U1 

-J 
























►— 























f- 

u 

2 


CV 

3 X 

0^ 

N <\ 

G G 

C 

f' 

A- 

< 

4 

8^ 

X 

4 

X 

X 

C 4 

X 

4 

r~ 

x> 


a 

a 

a 

a 

A 

c\ 

^ c 

X K- 

•-< 


C 

4 

K 

K* 

C 

X 

c 

0 A 

K 

c 

K 

h' 

• 


X 3 



<r- 




Y 

•- 


X 




r- 


X 

ir 

X 

X 



K 


• c 


















3 

c 


4 


« 

» r © 

0 
























X 
























x a 


3 

3 to 

(V. A- m 

-* 3- 

<M O 

*>■1 

<L 

cv 

r~ 

« 


4 

4 

X 

•-« 4 


o 

X 

e 

4 


C 3 

a 

ct 

— K 

A- 

<V 

^ o 

x a 

cv 

a 

cv 

4 

Y. 

K. 

C\ 

X 


© tv 

X 

0 

tt- 


• 


»•«** c 



V 




r 

#-* 


X 




8- 

88— 

t' 

X 

«— 

X 


tt-* 



X c 


















4 

© 


4 



7 
























U. 


o 

C -- 

o 

o c 

o o 

o 

o o 

cv © 

o 

© 

cv 

•M 

*) 

Q © 

X) 

0 

3 

tttt 



IL 

X 


















i 

•— 

i 



7 — 




















1 




C C. 
























*-• 
























-J 
















































►— 


4 

4 ^ 

A. r* <n 

— <\ 

G 


Y) 

»— 

4 

tt 


c 

H', 

rT 

G 4 

a. 

0 

c 

X. 

c 

h ® a. 

lO 

<£> v-« CD 

► 

Cv/ 

K) CT> 

X3 0 

cji m 

0 

3 

K1 f«3 

«-• 

X -8 

O — 

X 

0 

CV 

t- 

• 

W 

3 



«A" 




CV 



X 

V- 



A- 

•— 


X 

c 

X 


tt-t 

X 

8 

X C 


















4 

c 


4 



•CJ 























co 

























•X 
























of 
























C. 


4 

3 C 

(VNCI 

C <\I 

— X O 

Y”. 

0 

0 

f- 

X 0 

CV 

c 

© X 

X 


G 

X 

fr 


c. s 

4 

to 

-< <0 

8^ 


» 5 0- 

X 0 

CV CO 

Xi 

c# 

ID 

fO 


X 


o -« 

cv 

© 

4 

A- 

• 


O 



•-< 



i 

rj 

*-» 


r 

•— 




«— 

r~ 

X 

G 

X 


0+ 

Y) 


.3 V, 


















4 

G 


3 



2 



















0-i 





























u. 



o ;m 


O G 

0w 

— X 

cv 

*D 

X 

-v 

G 

o 

a 

K. 

80 

o 

t~ 

P 

X 

0 



u 

*0 

















0 

X 

X 

1 



2 — 

c c 



















1 

8 




























© 























CT) 

© 


























3 

4 IV 


h r 

•— r 

*-• c 

* V 

»"v 

» 


cx 

* 


•_/ 


g r~ 


._r 


-♦ 

n 

W 

n 

<r — 

- • 4. 

SJ 

O 

e-4 <C 

r- 

U 

-3 > 

X X 

VI CO 

"C 

4 

•o 

-o 

M 

X 

M 

O 

4 

O 

V 

A- 

• 

2 







cv 

c^i 


X. 

•-> 



r- 



X 

O 

X 

tH 


cv 


J C 


















4 

© 


3 



• «_> 



















cr-< 




cS 

c 
























/. 
























Y 





















• 



X 


J 

4 o 

C\i A- "3 

o •-< 

^ x> 

o 

cv 

•-8 

rO 

r- 

0 

4 

CV A- 

0 N 

AJ 

X 

0 

(V 

rO 


< J 

•— 

X 

— X 

A 

eg 

m o 

■C «■ 

(\J fO 

X 

4 

Y) 

K", 

•H 

X O 

3 — 

0 

K~. 

r- 

■X 

• 


o o 



—« 




A) 

*-« 


X 

•>H 





r* 

X 

0 

8 ** 



3 


© © 


















X 

G 


4 








tx 

a © 




1 

X 





UJ 



8— 









O tt 

UJ © 



tt 

U.' 

X) 




►— 



2 


© 







a >- 

a 2 



3 

X 

UJ 




< 



UJ 


z 

UJ 






a x 

. 



XI o 

X 

X 1 . 

X8 



K- 



X 


UJ 

© 





* 

© 

8- I 



UJ UJ 

8- 


2 





8- 

V 


X 

2 




2 

f— 

© 8- 

X 



© 

© 

o 

O 



UJ 


> xi 

o 


>~ 

O 


UJ 


O 

O 

© 

2 >- 



u a 

< 

X 

tttt 





O UJ 

© 


o 

U. 


X 


►— 


— c 

X © 



tt X 

u. 

UJ 

>- 



• 


o o 

a. 


© 



* 


>— 

o 

2 u. 

r x 

XI 


X 1 


•X 

4 

X 


or 


X 

X 

A. 

X 

2 


*— 


U 

o 

8- 

u. © © cr 

uj a 

z 

< 

U UJ 


8 

XI 

z o 

u 

o 

X 

O 

>~ 



D 

y uj «r 

i a 

< 

4! 

»•-< 


9 


►**4 


XJ UJ 

< u 


tt 

UJ 

X 

a: 


o a 

a 

© u 

a i 

u 

2 

z 

X 

1 

Z 8- 


z 

a 

tt 

© 

tt 

z 

« 

►- 

U 

-*• 

K 


ttx* M 

UJ 8- 

tt 

tt 

a xi 


XI 

3 

►M 

aJ 

*«« 

© o 

< 

« 

D 1 

© 

\A 

*•* 

►— 

X 


8~ a 

CC 2 

2 

2 

6 i 

u 

2 

X 

© O 

8 

> 

tt txj 

8»- 

© 


D a 

r 

2 

o 

X 2) 

S tt 


c© 

*- a 

XI 

«S 

X 

♦—V 


z a 

> » 

o 

D 

• 

• 


o 

•—* 

a 

o uj «t 

^ X 

z 

« 

o -• 

ttH 

2 

C 8- 



u 

« X 

tt 

a 

> 

> 

2 < 

3 

© 

IA. 

*• u. 

© i 

© 


X «X 

X 

►— 

'© 3 

tt 

u. 

X» u < 


o 


tt 




















X 

u 

o 


266 


UNEMPLOYMENT KATE 
















OKI AHO^A TABLE 15 (continued) 


ACDA/E-156 


« ir 
\r\ • 

«r _ 

c 

XU 


u 


(J u 

tt 

r c 

•» 

u 

p 

a ►- 

■— 

UJ z 
u u 
u c 


► Q 

r- 

cu 

l 

a 


i/ 


u • 

a 

L 

« 

z 

IT 

UJ 


CE 


U 


u 

09 

u 

c 

►— 

1 

c 

cv 

»- 


1 / 


tt 

— 


r 

li 

i 


u 
2 U 
C •- 

— c 


w 


(— 

w 


=> 

CO 


a 

X 5 

• c 
r u 
o 

¥■ 

x a 

C 5 
— C 
I «_ 

z 


u 

U 

z —■ 
c c 




U1 


tr a 
2 

X C 

• CJ 

x 

* 

a 
c i 
x c 
s o 

z 


z *- 

c c 

P— 


w 

g 


r x 
2 

J C 

• O 

o 

x 

a 
* x 

c o 
_J u 

z 



A 

CV Jf C 

4 a 

ip> «c ct;x. f- at cv *a c;r. 

cH «MC GC 

CV X), 

c 

cv 

O'! 

CC 


IT. 


* s • 

a 9 

4»<9^90.«»6 

J 9 

9 9 9 

9 9 

9 

* 9 

©. 

9 

• 

«*■» 

CV 

1 CV CV 

tr tr. 

CV CV , IS a- 


por 

O ’ 


1 

t 







I CV l, 

1 ■ 

1 



CV 



1 . 









• I 



1 

I 

t 


o 

C C‘ V 

CV CC 

« iCircccir 


<£ cv p' 

tr e 

>r 

cv 

ff' 

0 


if 

v * 

• • 9 

9 © 

• • ■ 99009 

9 9 

9 • 9 


• 

• 

0 

9 



cv 

1 p* cv 

it it 

cv fc c <vi r- — 

9C ♦— 

CV X. it 

f- 

1 

1 

C 






* »C| 



V 

V 





1 

1 


! • 

i 

1 


1 



1 




n 

x e cv 

X - 

iccs^jurp 

« if 

*- c c 

cv c 

kT 

V 


if 











c^ 

0 



1 

x - » 

1 1 

cv CV »- K 1 C X cv 

CV cv 

0 *. *- 

IP'. 

K 






* i 


i » * — 3 1 i 

1 1 

1 » i 

p^ 

i 


C! 







S 1 

1 





c\ 


c - c 

c c 

CCC (VC/CC 

c c 

It CV X 

c e 

C 

n 

in 

« 

1 



1 


( 1 1 



• 


1 

8 













4 

0 


9- 

<p» 

c — c 

c 

OCCfTC^o-C 

c* c 

x cv a 

^ ?>• 

9- 

X 

Kl 

cr 




1 


1 1 1 



9- 

1 

1 

1 

1 













J 

0 


c 

c 

cv c c 

c c 

ccc scacv^- 

c: C 

cv c cv 

C K 

Cv 

cc 

K-. 

if 



1 

1 1 1 

1 1 

1 1 I 1 1 1 1 t 

1 1 

,i i i 

i - 



n 










i 

1 






» •"» 

9 -» r-i C 

c c 

C C •“ C C r* 

c a 

C IV P 

9 - e 

cv 

CC 

X 

K 


o 

1 

». i l 

t. 1 

i i l l l. I l l 

1 1 

II I 

i 

cv 

» 


cv 




• X 

xx> r- 

PL, •-» 

(VI Kl K") K"i r, C CM 

9-i 0 

o x 

r, 

X 

X 

X 

X 

<r 

K 

K* if 0 - 

9“ 

<- K - e* ^ K" 

V— 

P~ K X 

it 

cv 

X 

rr 

<\ 

• 







9> «** 


0 

X 


0 






, 

: 




cv 





X 

i*- 1 - 1 ~ 

<\J ^ 

P WK> S 


it to 

CV X 

X 

N 

a 


o 

r- 

fT 

ir ^ ^ 


»- ft — cr K) 


irj- 

O It 


3 


cv 

« 





, 


»* H 

9-4 

o 

X 


0 

0 H 










CV 





o 

0 0-0 

o c 

0 . 

0 . 

0 . 

0 . 

0 . 

0 . 

0 . 

0 . 

o, o 

0 0 9-4 

o o 

CVJ 

cv 

fO 

o 


j: 




1 





1 

i 

1 



X 

\C h ^ 

Cs. 

P* CV tr. « K, C O' IT) 

« a 

r- cv 

CM X. 

(O 

9-9 

cv 

cv 

X 

XI 

lO 

K) X « 


—1 (T) rt K 1 


B « ^ O m 

cv 

X 


<} 

9 






9»» ^4 

91 

a 

X 


o 

»r 










cv 

' 

0 



.T 

if«CS 


hMOHpJCffCV 

9-C 

CV P~ CVJ 

CV X 

•-* 

tr, 

X 

K 1 

X 


m 

fT ^ «M 

H 

^ k> -* tr) m 

rH 

.« PO 1 ^ 

cr 

cv 

X 

K> 

K 1 

• 








9- 

O' 

X 


o 

tr 










CV 





o 

•H n O 

o o 

0 . 

0 . 

. u. 
0 . 
0 . 
0 . 
0 . 
0 . 

o o 

cv r< >n 

o o 

O' 

X 


o 

cv 


PO 








1 

H 

1 











i 













• 

9 



,c 

X P P- 

Cv. 9-1 

r- cm kv — cr c f 

— 0 

tr P~ 3 

cv cv 

fT 

o 

cv 

X 

3 

cv 

fO 

K) J -1 

H 

»-( .-o <o lO 

—4 

XI >0 P- 

cr -o 

<v 

•4 

rO 

o 

9 




•—t ei 


o 

lT 


O' 

IT 








i 


cv 

i 




J“i 

y) s 

rvj —c 

f^rvji r )O' 00 ' 0 ' | M 

rH O' 

H h- »“4 

CV IV 

^•> 

X 

(V 

X 

X 


K“i 

rt 3 fi 


^ «T KJ K5 

«~1 

a m r- 

cr io 

e-M 

X 

9) 

rO 

• 





«M H 

*H 1 

o 



O 



a — 



O _J 

i 


X 


X 

1 

o >-< 

UJ o 

M 

UJ 

X 

p- 


X 

a z 

ZJ nr 

X 

< 


a x 

^ — 

X O 

3 

X X 

p- 

X 

U.’ 

i— x 

uj uj 


r z 

X 

2 P- 

Jl p- 

«-i X 

_i 

u 

o o 

X 

O O 

_l 

z - 

o a 

< 

I - 


»-> D 

M n 

rc u 

t-i a 

u. 

UJ P- 

• 

p- C 

X jJ 

3 X A 

>- z 1 


x < x 

a 

u c 

p- 

U. O J K U A 

z 

< u X 

‘1 


xxoxajoa • o z x* i z,*- 
-« xc Kxtczyro i uzs j 

KffilMUOt-Xl/'KXw 
nj«3at<o*-«ic»- 


s; 

Q C 

Z < 


z z o 

- o c 

I U J. 


X 

' z 

£7 

< z 


.> X 
O U! 
o o 

X 

x z o 
x <t u. 
u *- 

H JO 

> *- x 
K > * 
UJ —» QC 
A J < 


►— 

Z 

UJ 

X 

>• 

o 

_l 

I 

UJ 


< 

p- 

o 


< 

-J 

D 

a. 

o 

a 


z 

x 

X 

>- 

o 

_J 

X 

X 


s $ 


J 

•-4 

u 


UJ 

u 

X 

o 

u. 

X 

o 

< 

-I 


> 

u 


267 


UNEMPLOYMENT hate 















0*«T.0N TABLE IS (continued) 


ACDA/E-156 


« * * 
st »y 

yi£ i 

u *• 
uu * 
?c • 
u ft 
a ► ~ 

UiZ 
U U ' 

u © ** 
•-or 
C U Q 
& 


—I * 


1 


l/> 

u 

C- 

L-' 

c 

u 

u 

u. 


«/ 

or 


—• (V 


* 

J 


I 

^1 

© 

I 

A 


— c 

h - 

I 


r fc 

c *- 
*- c 


Ui “ 

HS 
ui a 

g*.! 

o 


I c. 

c a 
- c 
X © 
C 


a 

u. 

z 

cc 

V _J 

fci£ a 

a“| 

s*.£ 

r- 

<r 

¥ 

C f 

ws 


u 

u. 

? 

c c. 


30 -J 

J-TJ1 

8*1 
3 *W 

¥ 

6 i 

JU 

X 


C A 
• • 
A »• 
I 


Jc 


(V 
• • 
A A 

t 


! i 

<Mretiwrrt •ter co A A<> 
• •• •¥••••••)•••••• 

r r a a ► •■ ¥ f e 1 *-Ar. r e. 

<# - • ! OS* 

I i 


A 


C 


ft 

5 

i 


© o m 4. 

* 

r.p'o 

Clf 

y if c </c 

• 

ft 


ft 

• • • • 

• • • 

• •( • 

• • • 

• • 

• ••••• 

• 

• 

• 

• 

ft *- ft ft 

StA/i * 

ft C — 

»- 

— ft «r * f-i 


0+ 


*-• 

•» 


l 

—-t 


¥■' 





i 


♦ 

< . 

i 


• i , 


. 

•i 

| 


jr c t» 

r r ¥ 

u cc 

if. c <c a o 

ft r. ft c ; 

ft 

* 

c 


• • • • 

• • * 

* * • 

• 04 

• • 

• ••*•• 

• 

• 

• 

• 

l * — « 

^ » c 

ft ft ft 

1 ft 9 

ft ft 

^ •*• * «* | f 

ft. 

<r* 

c 


l i 

* i 

t i - 

ft { 

t • 

i * » i *. 

i 


ft 


i 


l‘ 

1 


i 



*■ 


• • « • 

• • • 

t 

• • • 

. J 

1 

• * # • • «1 

• 

• 

• 

1 

• 

«— C *-'© 

c c 

C CIA 

e — c 

c e 

©ft *- >£ C ft 

© 


ft': 

c 

1 1 


4 

1 

• 1 


1 


ft 

1 


•-©*■• C 

CCA 

C C IT. 

C ft »- 

c c 

C 3 ft ft- C fti 

<v 

«r 

3i 

c 

1 


1 

l l 


r 

•» 

ft 

1 


c c CC 

C C ft 

CCS 

C ft ft 

• 

c 

C ft C ft C *\; 

m. 

tr 

1 

C- 

3 

1 1 1 1 

1 1 1 

• »l l 

1 1 1 

1 i 

1 1 • I 1 1 

OOP 

ft 

ft’ 

P~ 







l 




• • J • 


• . . 








— c — © 

© C ft 

— c; — 

c c — 

•- c 

c J At r-C 


<£ 

3 

ft. 

till 

I 1 • 

i t i 

1 1 « 

II 

1 1 1 « 1 

A 

1 


ft 


r- c\ a. c 

A'C C 

ft ft ft »r ** c 

» C 

a 3 3 fti »r © 

ft) 

© 

t> 

o 

ft- ft — 

— * 


— r 

ft" 

1/ ft 1 1/ IT 



<U 

ft 






OP* •* 

a 

V 


<t 



* 





ft 

1 


C A. O « 

<\ c < 

I 

¥• cv in »r »• © 

1 

iroseioc <£>c 

0 

If) 

ft 

st 

A ft — 





tr ft. if it. 

0 

C 








V» Oft* ON 

a 

*• 


tf 








ft 



O © © O O © O 

© © © 

CO© 

e o 

© © © — o © 

ft 

•■* 

ft 

o 




1 


' 


1 

1 

1 

t AO ( 

AC A 

ft ft c 

If O f If C 

«C ft- «f «C I/. <& 

ft 


ft) 

K 

A ft) — 


>r «ft w 

iT ft> If) (T 

ft 

ft) 

ft 

3 






OP* •• •* 

at 

** 


« 

: 







ft 



<ACOAONAAO^OO 

tt a 

« ft- x. ft- m <c 

© 

ft 

IT 

K 

N ft> •« 

— ^ 

»o 

•ft i»» ^ 

¥1 ft> il iT 

ft 

ft> 

ft 

3 






fti ft* p- 

c 

«M 


X 








ft 


• 

0 

0 

0 

0 

0 

0 

1 

o o o © © © 

Q 3 

O ft ft) © © 

9 

3 

o 

#4 








1 

«■* 

1 









0 


HAff l 

ft © ft) 

A ft O if O' 9 

IT © 

**<&;/ 

3 

IT 

ft 

% 

V «i 


H ^ 

-ft 

•o 

i) A O if 

ft 

-) 

ft 

3 






r< p4 

© 

** 


£ 








ft 



iAy«A3- 

»u ft a /i <y ® 

» O 

® O W1 ft- If) J) 

O 

<2 

—4 

• 

O' 

rv ¥< 

•N X 

-< cw 

(ft 

•O h 

If. ft) /) If) 

0*4 

ft) 

ft) 








X 

•4 


V 


<c 

ft 


ft) 


X ^ o 
*- u Z 

J) M M 

D tr z 
c o 

2 « £ 


Cl 

O 

a 

a 

ur 

z •- _i 

O u -J 
5 •« 

- c x 

3 1 ui 
X & J 
u> *>• 

un o *» 
Z O * 
OOaJ 


Ui 

-J 

w Ui 
*- ft 

X - 
Ui ►* 


Z 

*-* 

5 


o 

Ui X 

*- u. 
< I 
U X 
— Ui 

II 

wk *- U. -J 


X ,/> 

*- UJ uA 

S/I § 5 ¥ l/< 

U Ui *- b 2 
-j uco 
•" U X < X — 

V •« at u. ui *» 

3JXUHLZ <UU 

CL © y > •■» © V«MM 

lux :iu 

K « •? 9 yi 0 * 


Ui 

u- 

« 

►- 

i/l 

ui 

X 


> s/>! 
Q Ui. 
vt. ui 
_ *i 
» «/> 2 O 
0 Ui « u. 

zu- 

J O' 


«• * sii i? • ui h * j o 
zixS * uif,jfi I >~ui 

mUUUXS/I<|!m<Zk >1 
2 ti<o-«-io>-a-uw# 


I 

o 

^ 3 


Ui 

-J 


s i 


o 

X 


z 

¥ 

► 

o 

-I 

X 

X 

s 


>' 

«4I 

u» 


u. 

u 

8 

u. 

I 

33 


> 

•«* 

o 


268 


UfiEMPLOYMFHT HATE 













ACDA/E-156 


H 

ir «r 


tr 


Jtl 


i/*c 

U —I 

yu< 


u. 

cv 

a k 


UJZ 


U.U. 


b. c 

— 

►- a 

ft 

cu 

1 

CL 



If 

J 

u. 

ff, 

c 

1 

2 

If. 

u. 

—- 

K 


Ll 


u 

— 

li. 

<t 

*-• 

1. 

c 

rsJ 



ft- 


tf 

| 

a 


►■ 

r- 

u 

i 


~ cv 


— c 


u. 

2 U- 
C 0- 

c 

_J 

w -* 

X 7 
•C 
*r u 
C 

¥ 


8 

s 


z a 
e > 
*- c 

i «- 

2 


u. 

u 

T •— 

o c 
“ I 




ID 


lO 


1 1 i 

1 ! t 

<V »- 3 ' ts. IT CV K 

«v »♦ Aft rr ft ft 


' i 

o c, cv — a « <0 ir e *- c cm x 1 

““••••• • • • ■» 

«v. r if i~ cv a ¥■, oi 

I «v‘ 

» l ! . Ii 


I'll 

ff *C C|fl Jito 30 CV CC CV 3 3 IT X* CV 0 3 0 
• • • • • • • • • •••••«!••• • • 4 

<v I io cm id x cm io if ire fti —^-tviTs r-, 

fc- fc- I tr\ 

. Ill «| 

• ! 1 ; ! 

* * ^sftnr,o x f- c ^r.kr.,»- ft 1 # o! 

• C •- I «- I ^ r ft o ft k ^!ft ^ t- ». | ft 

• • I l I I 1 - I cv » • »• i i i i r. 

il i .li 


X 


r 


o ' 
•» 

*i 


e. 

cv 

I 


<c 

* 

r- 


r, 


• •••«•. •••••••••••••J 

I 3 I - - 3 I' 

' I ' * I 


1- 

3 


*! 

t 


CVC»C3CVrv.-3 — CV — OX—C- — C3CMC-! 3 •- 

' :? 1 T | < '- = ' ’ ' * 

* i 1 ! j 

c »-<mc ftiifc-ir <t«s^^ft«fthi <\ st. 

I I I I I I I I II If I •» 3 I I I •— I »- I I. 3 CV 

III II — 


4 

3' 

M 

I 


•i 

c 

if 


f- 


irl 

i. 


I 


<\.vir<\/»~«.CM3<\i'o-**-*-*ir~*“ir ect'i'v e- a 

l i II I II l I I l.I cm i I i ft if I r 

i I l | ~ 

I 


f) 


mo *<icu«o>D«ir a3«coiofO»^f\iiDO »o cm cm ifl —« 

<»-<cafti3ttvCcii-ifira3j«B 3 3 cm x 

*• I 3 vt —. a •- cc x if 


3 

3 

X 




3 

O 

ft- 


m , • 1 

3 O O' O 0 3*^ CCffftH 3 3 vCKV3M«-iOlDlD, 
>C ft KiO 3* f- 3 Ct < *■ D If ft 33 330 <X 3 CM 
•ft 3 vO •- E n C ^ 


o 

o 

x 

3 


X, 

IO 















o 

o 

-- o 

0 

1 

0 

0 

0 

1 

0. 

0 

2 

0 

0 

0 

CM 

3 0 0 

X 

X 

X 

C 






■ 



* 


mm 

* 




1 

1 



i 

1 

1 

1 

1 

. . J 

ml 

«» 

1 

« 

• 

3 

a 

«D <: 

e if. 

cv ft- 

ec iD «- if — 

CM CM ID 

vC •"* 

ftlOff 

o 


ft-] 

X 

X .ft C C" 

»o 

3 X 

<C ft- ID 3 3 

X 3 3 

IO O' 

ft- 3 -4 

X 

O' 

-4 1 





mm 


CV vC 

, 

X »- 

a x 

X 

X 


ft- 



1 




♦ 


1 

cr 


i 

3 







f 


















4 

• 

3 

o 

ft- O' 

O' 3 

CM f- 

® 3 — ID O' 

CM CM. IO 

3 o 

IO IO O 

3 


m 

X 

X 

•»4 

03 03 

cm r- 

3 ® vflMOS O 

X 3 3 

IO O' 


ft- 

ft- 

CM 

a 




mm 


1 CM X 

H 

e — 

X X 

X 

X 


ft- 










3 



cr 







1 

1 



! 

mm 

1 



o 

CM 


-» CM 

1 

4 

1 

1 

8 

CM — —l O 3 

X «H o 

X 

IO 

X 

•-« 







i 



X 

3 

KX 

CM 


I; 


_J 

















►-» 


vf 

o 

a o 

o ft- ir r- 

X X — 3 

»- 

CM CM IO 

Q 

ft- 

<r a 

(T 

X 

If 

fO 

mm 

^ a 


0 


o o 

lO ft- 3 X 

O X >0 3 

■o 

X 3 3 

3 O 

X> 3 

-< 

O' 

o 


CM 

* 




•-1 


CM 

X 

n 

X 

3*1 

X X 


If 

r- 


f- 

3 O 








i 





a 



3 

• o 

0 






1 








H 



D 

















if 

















A 



o 

ft- O' 

O 3 CM X ft- CM ft") 

o 

O CM O 

-i O' 

O' fO 

X 

ft- 

CM 


•H 

1 2 

*-» 

X 

•H 

X X 

CM f- 3 X 

X X CO 3 

cv 

X 3 3 

IO X 

X 3 

H 

IO 

X 


o 

O O 




-« 


<M 

o 

•-M 

X -ft 

X X 

1 

iD 

X 

-i 

ft- 

_l o 













3 



3 

2 






f 


1 

i 




1 

i 


«*■» 

| 







U. 

1 


t 




1 



1 






i 

O _l 

a 

un 



UJ 


j 

V- 









O — UJ o 

mm 

UJ 

ID 


ft- 



2 









a ft- a 2 

T 

rr 

UJ 


< 



X 


2 

X 






Q. x Z> « 

l/l o 

X 

D D 


H 



X 


u 

u 





ID 

X ft- X 

; u uJ 

V- 

O Z' 


D 

ft- 

i 

>~ 


X 

z 





2-ft- 

_J ft- — vD 

X 

u 

o o 


X 

> 

D 

o 


>- 

o 



UJ 


o- y 

_l 2 — 

u z 

X 

x ”, 



9 

ui 

-J 


o 

X 



!t 


83 
ft- C 

— Q cr' _i 
* x 2 Z 

, m QC 

/► X 1 

u 

-J M 

X <* i/* 


• 

X 


s 

Q. 

X 

*> 

a 

X 

*1 



h- 


13 O 

ftiiDjffua 

z 

X U UJ 


1 

D 2 

o 

X 

o 

Zi 

S' 


>- 

i 


r> a 

UJ < 1 CL 

< UJ > ft. 

< 



D UJ X 

u. 



X 



X 


O 

x a 

jua i 

13 2 I 

X 

1 2 ft- 


2 

U •- 

i 

J 

ft- 


< 


K 

u 


h- 

Qj r— 

•— —> X /! 


DO"— 

& 

»-• 

— -J 



* 

D 



i/i 


M 

t/l Q 

z m z 

I|XO 1 

u 

2 X _J 

5 

1 

> *-« 

uj) 

►- 

X 




3 Z 

2 TO 

XIDIh 

u u ft- a 

1/1 

< X - 

< 

Z 

X > 

at! 

o 

3 


• 


Q 

O 

mm 

o c 

UM 03 

X' < o 

*—I 

z o *- a 

*—• 

l±) M 

z 

*— 

a 

> 

> 


2 

<1 

r. 

U. 

*— X J CL 

a x z x 

X 

ft— (w»i O ft— 

u. 

D X 

<. 


o 







i 








1 


a. 

U>| 

o 


269 


UNEMPLOYMENT RATE 3,2 2.4 2,6 2,5 .0 ?.Q 












ACDA/E-156 


i 


TJ 

V 

3 

a 


a 

o 

u 


3 

a 


c 

7 

_! 

i r 


2 

c 

X 

X 


« ire 

l 

if •< ‘ 
« _ *- 
c 

X C ! 

it. «- 

CJ u « 

7 jC'I 

u cv, 

CL I- 

Ul 7 I 

U U. 

U L — 
►•Of' 
C U I 
a — 


v 

u 

c 

2 

UJ 

a 

i< 

it. 

u 


« 

i 

if 


« 

i 

<\ 


if 

a 


r- 

t 


u. 

2 U 
C 

—c 


u) 

H C 

w a 


§ 


0 

p 

x a 

i£ 7 

*- c 
To 
7 


I 

U. 

u 

7 — 

cc 


o 

M 

S3* 

H >cc 
3 »o 
03 r* 

<£ 

* 1 

a 
c x 

UJ C 
X Lt 


u 

u. 

2 ft 

CC 


: 

3a| 

.0 

* 

Cl. 

•4 v 

OO 
-J u 
7 


t 

a 

k p «c n c 

r. c cel 

A. A 

a 

p 

<Cf. 

CM 




a 

ir.i 

if' a! 

IT 

• 

* *> * * 

• 

• •• •* 

• * 

• 

• 

* 

♦ • 

• 

• 

• 

• 


• 

•- 

•• 


r- t r- , 

a 

cv cv 

P f 

A 



f f 

CVt 

a r 

0 

<PO 


sc 







1 


< 






CV 

i 

t 

8 




* 


, | 

1 







•l 






r 

a 0 p a 

c 

c p o 

If c 

a 

0 

if 

CV If 

8- 

cv 

« 

r c 

a 

o 

A 

a* 

1- 

Cl 

•— cv ru if 

IT 

CV> IT 

•" Cv 

r- 

w* 



cv 

ir 

a 

A- 



iT 

i 



• 


1 

r 1 


1 






P' 

• 1 

rl 

! 






1 

• 

8 







• 




1 



CV 8-i f If 


c ait 

cv tf 

If 

c 

0 

<c c 

*■« 

0 

0 

^ c 

a 


If 


P 

• 

* • • • 

• 

• • n 

• • 

• 

• 

• 

«• • 

• 

• 

• 

• • 

• 

• 

4 

* 


1 

•-Ilf 

1 

AAA, 

1 1 

i 

ir i 

C 


Cv 

cv c 

^- 

1 

I 

8 A 

if 

4»- 

CV 



» 1 



Cl 

» 

1 

8 1 

8 



r 

i 

8 

P 




1 


i 

1 



1 




1 





CV 

C 

1 

c c! © f 

c 

ere 

p c 

•— 


C, 

c c 



P 

c c 

lC 

a 

«■“ 

cv 



♦ 


1 

1 

1 

l 






1 

i 

#» 

t 

8 

. 


C 

C C C f 


c c c 

P c 



c 

c c 


•A 

p. 

c c 

A- 

cc 


cv 






I 

» 

t 






PA 

1 

•— 

1 














1 


1 




• 


• 

• • • 

• » 

• 

• 

* 

•> • 

• 

• 

• 

. J 

• 

• 

» 

• 

e 

c 

cc.cc 

c 

c c c 

If c 


tr 

c 

c c 

pA 

C 


c c 

P 

a 

if 

cv 


1 

• 1 1 1 

i 

I 1 i 

1 1 

1 

i 

I 

i 1 

1 

I 

i 

t f 

CV 

w~ 

- 















I 

1 

i 





c 

c c 

c 


c 

c c e p- 

c c 

cv 

c. 

C G *- 

. 

A" C C 

c 



4— 

0 

. 1 

. 1 t. 

1 

1 

i 

1 

i.iii 

I 1 

1 

« 

i it 

i 

1 . 1 

7 





a 

f »c 

a 

sC 

V* 

-A Wf 

*r a 

cv 

a: 

2T f^t 


a o if 

c 

A- 

A- 

a 

e* 




a— 

•— 



>t 


ir 


f IT f 

s» 

A 

«P- 

0 














9 

0 





a «iCCA-.«AW 3 

io <c cr 

co a K" if 

JA Of 

C 

X) 

lC 

fO 

8^ 

•* K“ 

-X 

if 

f X X rr 

<v 

A- 


0 






a 

0 


9T 



o 

c o 

o o 

© 

c 

c 

© 

© 

o 

o 

© 

c 

© © c 

o 

c 

© c 

4l 


H 

• 

© 

vC 









1 









8 

l 

l 


a 

CM & 

CC A- 

•-* 


A- 

CV 

G 

fT 

A 


X 

a >o if 

a 

A 

© A 

a 

r. 

X 

X 

X) 




PC 




lO 



N0 


f 

—4 

X 

X CM 

G 

X 

M 

0 


















a 

0 


>A 


a 

1 

— X 

« A» 

M 

«»• 

1 

A- CV 

c 

1C 

A 

4-^ 

X 

a f) f 

a 

X 

O ^ 

»A 

IT 

A 

X 

a 


M 

P4 

H 




to 



X 


if 


x> 

X CM 

o 

X 


0 


















a 

0 


f> 













• 


GOO 

c o 

o 

0 

0 

0 

0 

0 

0 

2 

0 

I 

0 

0 

o —» 

G O 

X 

<*H 

X, 


•o 




1 

1 



i 



1 

• 


» —< X 

cr a 

PC 

f A CL 0 K x c <r 

a to x 

a A 

O X 

»f> 

0 

X 

X 


-1 

*1 


CNi C 

X 

-t o 

X cvi 

o 

X 

1 

0 









a 

0 


to 



a -« occAf-tAcvoto z -o x, ato a axox 

A 

X 

pH 

• 

X 

Pi 

CM X XfIXXCV 

0 

X 

cm! 

0 


• 1 

to 

0 

»o 


cv 


3 


if 


c 


3 


tO 

3 


a 

m 


u: 





O 

-J 





X 




O 

M 

Ui o 



—• 

UJ 




cr 

►- 

« z 



—> 

nr 




a 

X 

3 *-i 


X 

c 

•*» 




X 

U 

A x 


u 

u 

A 




Z A J 


•-• X 




U 


u 


C U J 


2 « 


o 

a 

< 


X 


M — 

r 

X _J 


T ^ 

X 

u. 




f E * 

H.. 

O X X 

>• 

I 

1 



A 


o o 


li 3 JOfW 

a 

2 

>• 

-t 


Drew 

<r 

i a < 

UJ 

> 

— 


X 

5 

eaa j 

u 

X 1 u 

2 


X 

z 

f 

u 

-i- 

A <-l 

P-C 

U K H 

1 

X 

X 


X 

p4 

*-4 

X O A 

X 

X Z X 

X 

o 

• 

u 

D 

ac 

2 

SOX 

a 

f — u 

O A 

a 

X 

Q 

o 

t-t 

O O aJ 

< 

5 x x 

< 

o 

—« 

—4 

2 < 

'I U It. h 

u. 

JlU 

X 

X 

a 

z 





UJ 

A 


t 


X 

A 

z 


A i 


UJ 

< 

Uj 


2 

UJ 

X 

X A 

¥ 


UJ 

«J 

X 

2 X A 

A 


z 

X 

e 

O W > X 

o 


A 

o 

X 

A Q UJ. 

-J 


o 

u. 

UJ 

a • au; 

a 


-) 


X 

< X X X' 

z 

z 

X 

X 

« 

U U i X z o 

UJ 

o 

¥ 

o 

* 

A — Xltl «lL 


A 

UJ 

X 

1 

2 A z (J « 

-« 

A 

2 

< 

X 

3-IJhh JQ 

« 

< 


J 

2 

* . J Q 1 > A UJ 

A 

-J 



« 

Zh<2QC>I 

o 

3 

• 

• 

X 

O A X a Uj —• fle 

A 

a 

> 

> 

—• 

O O A Ul X O 4C 


o 


A 




a 

o 

u 


j 


270 


UWtMPLOTMFNT HATE 5,2 



















SrttiTH CAROLINA TABLE 15 (continued) 


ACDA/E-156 


« V tt 
!• 

tr »r 
a » 
c i 

ve¬ 


L 


<U u 

C' 

7M 

a 

<v 

a *- 

w, 

UJ z 


u u. 


u a 


► c 


c a 

! 

a 




if 


u 

a 

u 

9 

z 

4T 

a 

•aa 

cr 


a 


a 


a 

* 

1 — 

? 

c. 

r 


w 

*- 


1 / 


0 

— * 

►- 

f- 

u 

1 


il. 
2 U 

c »- 
-e 

w Z 
t- a 
w a 

§ »c 

* 

* 

i a 
c s 
i- c 

X c 
z 


u 
u 
z *- 
o c 

_J 
u _• 

L, « 

S a: a 

o a 
A icc 

S * <-> 


Q 

o a 

a o 

a u 

2 

D 


U 
a 
z *- 

o c 


a -i 
H "O l 

“ J 
2S 3 c 
•3 • «-< 
to O' 

JV 

* 

a 

j a 

o o 
_j o 



(vcn^cir 

cc a 

a C 

4 

«. MV <V«C C IT 

<■ « M, W <, 

C 

jr 

MVl 

a 

•T 

• 

• « • » 

♦ » 

“O'*® 

• 

9 • *> 

• ' *4 « 

<A • • • 

• 

♦ 

• 

«M 

• 

•»> 

*v 

r 

*r a 




tv ir a. 

0 i 


1 

<r 




• 



1 

1 



71 


•i 



a 

c 0 r k 

0 c 

1 

¥ C. 

•• 

a U" •- 

sr ev »r 

«£ « «\ M. 

c 1 



a 

>> 


t\j 

•- tv; tv a 







«1 

• 

• 

- 

• 

•** 

a mv 

*r -1 

a 

M~ <\. 

a-» 

N9S 

H 


« 

cvH 







» 

•-* 

1 


K 










1 



«• 

1 

1 

1 

T } 



r- 

tV 61 0 

C *£. 

w 

a 

C <\ f' 

vC If C 

u 

•» 

u 

c. 

K 


U 

a 


• 

• * • • 

• • 

• • 

• 

• • • 

• ♦ • 

• • * • 

• 

• 


m 

• 


9 

fill 


tv 

c 

-vfA 

fV IN fV 

— • * • 


M- 

9 





» 

9 

* « 


s «- e 

1 1 1 

» 

M- 

1 


ir 




* 



• 

» 



9 




c>. 


e — c w 

M' C 

c c 

CV 

c c c 

c c c 

M - If C 

ff 


C 

if 

cr 






1 

1 






9 






» 





9 


t 

* 












6 


• 

• 



c - c. a 

K «— 

c c 

M- 

c c c 

c c c 

S Ah c 

r 

•» 

tv 

X 

r- 






9 

? 



tv 


a 

9 

r* 










l 


• 

1 


c 

c 

c c c •- 

c c 

c c 

K 

c c — 

c c c 

- c .- c 

K 

5T 

« 

X 

if 

*- 

» 

till 

t 

1 s 

I 

» 1 i 

1 s 1 

Sill 

c 

M 1 


tv 











1 

1 

9 





c — c tr 

CV- M - 4 

C cr 


CCr- 

c c c- 

a •- v£> c 

c 

If 

a 

tv 

MV 

0 

1 

1 II! 

k 1 

1 i 

t 

1 1 t 

1 J 1 

till 


tv 

9 

1 

tVJ 

1 


H 

ru h- if c 


«t K- 

MV 

c m- «c c a a 

IT C Ifl If 

H 

if 

tvi 

a 

K) 

or 


& *- K 

^ - 

c. 

r 

M - 


M M If If 

cr 

c\ 

a- 

f 




*»► 






9 - 9 — ^ 


C 

a 


C 











«M- 














* 

• 

I 

• 


Cv 

fv. e it 3 

O C. 

a mv 

a 

O M’' M- 

e cr u: 0 r~ 0 uv 

9*4 

O 

c 

«VJ 


r- 

3 

a — a 

r- — 

w r. 



m- r ® if 

e 

IT 

r\ 





•-4 








O 

a 


c 











0* 

tv 


al 


e 

c e e 0 

O O 

c 0 

c 

O O C 

000 

COCO 

0 

CL 


tv 

O 

z 




, 





• 


9 

9 



tv 

At IT, 3 

0 

cr. »r 


C M5 ^ 

a c«c 

ahoif, 

tv 

If 

•-» 

O 

® 

to 

a- 

a »-< a 

h 

CM 

MV 

MV 


MV MV sC UV 

vO 

fV! 

O 

If 

cv 









•— a- •— 


c 

a 


c 












tv 


a-4 


<\J <V « iT MV 

C f*- 

O' MV 


C K' S 

C7 «C vC 

® K C Ifi <VI 

MV 

tv 

1 

Cv! 

« 

•a- 

a 

a ~ a 


CM MV 

MV 

•■4 

MV MV ® If. 

x> 

tvi 

0 

JV 

tv 









«m«» a«4 


O 

a 


c 











•-4 

cv. 

1 

H 


c 

chon 

^4 O 

O O 

c. 

O O C 

OOO 

H M N O 

0 

X 

r. 

O 

• 

O 












9 

0*4 

9 

t 


tv 

<v. «r U' 4 

— f' 

O M. 

•-a 

G Ml h 

0 a v£ 

c e <\ u 

a 

if 

ff 

a 

0m 


* 

a -« a 

fu. #-• 


-V 


H 

f f f f 

f 

'NS 



MV 


r-1 






mH 


O 



O 












OJ 

' 

*■« 


CU 

A t Jl« 

0 r- 

S MV 


0 mv a 

O' ® jV f- 0 /V 

X 

X 

Cl) 

« 

• 

H 

3 - 

3 & 

f*. H 

CV» 

MV 

MV 

MM • 

MV MV <£> if 

4> 


0 

in 

•O 









m -4 «-• 94 


0 

X 


0 











^4 



^4 


uJ 

a 


if 


uJ 

O •-* uJ 

a: ►- x 
a x x 


o 

z 


Z *- -J 9- •* If 


O O _l Z 
— 3 — O tx 
► : j j,: 

w> o 
5 or uj 
a a u 


>■ _i 
x z e 

►-UZt- “* 

Z X Z Z O X 
a j"O ow 
Z « z u a <- 


m- a 
a l 
u x 

v-4 Ui 

a x 

<c —< 


-j 

X 1/ 
X -9 

a 

u 


a *f 


m- >-• 

z x 


a x 

CL Li 


if o 
uJ UJ 
_J 

u a 

-« x 

m- X I 

a uj a 

« a if 
x o i 
u ►* x 
< o *- 
J t 4 


11 J 


M- 




If M- 


z 


M- 


UJ «3f 


UJ 


z 

Uj 

If if, *- 


X 


UJ 

O 

X Z if 1 - 


>- 


X 

X 

00 ; UJ > 

if 

0 


>* 

O 

x H <? 

UJ 

-1 


0 

u. 

UJ H • iA 

Oi 

5. 


J 


a a/ x 

X, 

X 


X 

X 

4 UUJ S if Z 

0 : 

UJ 

5 

X 

0 

1! H,M If UJ < 

u. 


•—* 

UJ 

CO 

9 Z M- ZU- 


J 

»- 


a 

(fO " ill “• M J 

a 

a 

< 

5 

-j 

ZSJO 9 > -* 

UJ 

>- 




** X « < Z X > 

X 

O 

5 

• 

• 

X O X •" UJ *“ 

X 

M- 

a 

>, 

> 

M U 3 M ii 1/1 u 

<■ 



-4 

— < 

1 

1 


a 

UJ 

u» 


271 


UNEMPLOYMENT RATE 5.b 4.6 S.O 4.A ^.2 6.4 
















SOUTH Oakota .TABLE 15 (continued) 


ACDA/E-156 


\ 

I 

*ti cm. 
%r •!r 
" c~ 

JT C -I 

W «v 

O I-i 

UJ 7 
iL U 

u u- 

► ft h 

CU. I 

Q. M 


If 

u 

c 

7 

u 

a 

u> 

u. 

u 


►- 

1 / 

o 


I 

If. 


« 

cm. 


l 


5®§: 
S <o 



| | 

, 

1 


1 

* 

1 



' 


I 

1 

c <c «'c 

CM If cv 

e- cc'cm cc r. 

a «ci 

•Tl <— 

— f- 

CM 4 

CM 

r- 



V 

«ur- «0*“ 







9 



• 

• 


a a a 

A 'Cv 

CV «C 


v Cv. 

a * 

•• 


c 



i 

• 

; i 

— 

1 



CM 



•-* 


• 

♦ 

• 

1 

1 

1 



' 



1 



<e c'r 

CM; 4 »*• 

1 

CM 0 | 0 

a 0 

0 If cv; 

If 4 

cv r- 

If C 

V 

o 

4: 


a 

• * d • 

• • • 

* ♦ • 

• » 

• • d 

• » 

• • 

• It 


• 

• 

• 


cv — r.ita 
r* ■ 

If If <\ 

r- cv 

ir — 

•“ 

— cm if a 




CM 




1 1 

1 

CM 

*1 1 



f 





' . 

1 

1 




1 



' 


I 

e'e c' cv 

cue 

► C If 

CM f 

o ^ 

CM K 

c o 

CM C 

0 

CM 

if; r- 

•r 











d * 

•» 

l c- - i 

► 1 A 

CV CM. If 

► «£ 

* CM CV 

cv ^ 

- 1 

1 f 




- > 

1 1 

1 1 1 

1 CV 

i i n 

1 1 

1 


1 


r 



' 1 



1 

1 



1 




1 


• • 4 . 


. J . 

• • 

• • «1 

• • 

• •» 

• • 

• 

• 

d 

• 

A' 

► c cc 

c e e 

c c c 

©;C 

C C Cl 

C «-■ 

C CMI C CM 

If 

If' 

CM 

If 


l 

« 


11 

1 

1 

1 

1 

! 


i 

t 



' 

. 


•- c c c 

c c c 

c e e 

c c 

c c c 

c ► 

c cv 

c cv 

a 

f- 

CM 

• 

a 


• 


i 

1 

I 



1 



I 



• • • • 

• « • 

i 

• • 

• • • 

• • 

• • 

• • 

• 

• 

• 

• 

c 

c c c c 

c c c 

c c c 

c c 

c c c 

c — 

c c 

C CM 

ir 


a 

CM 


1 1 » 1 

1 1 1 

' V 

1 1 

1 1 1 

1 1 

1 1 

1 1 

i 





► c oc 

c c © 

1 

c © o 

c e 

o c © 

o — 

© CM 

c c 


a 

•f 


c 

.1 II 1 

1 i 1 

III 

1 1 

II 1, 

1 1 

I 1 

1 

i 

. i 


! 



CC *M 

j c r- 

c c 

A 

CM' If 

CC c 

a f 



J 

©‘ 

«r 






3 

If 

if 

if 














f- 


CM 


1 











i 

d 


CM CM -« 

CCA 

acr 

© © 

cmi n 

CM <C SC CM 

a f- 

r- 

H 

CM 

*1 






a 

If 

a 

if 

CM 




| 








CM 



CM 


© © © © 

COO 

© O © 

o © 

©CO 

© c 

c o 

o c 


•H 

© 

C 

■£ 

• 










1 



► A ►► 

\ 

o © — 

a c ia 

c c 

cm i- m 

CM 4 

CO CM 

a 4 

a 

CM 

IT 

•f 

.f 

J H 





a 

If 

if 

if 

CM 

^4 

f- 




1 






CM 



CM 


CM — 

o o -< 

i 

a © If 

© © CM f>- *3 

CM If 

ee «i 

a 4 

a 

H 

if 

CM 

a 






a 

if if 

if 

CM 

r-< 

f- 










CM 



Oi 

. 


o o o © 

o © o 

O © O 

o © 

o o o 

O -l 

O — 

o © 

CM 

H 

On 


if 










i 











# 

• 

• 

• 


•* A A ► 

© O •- 

a © If 

c © 

cm a- if 

CM 4 

CC CM 

a »r 

IT 

a 

>r 

a 


^ ~4 ~4 





a 

JT) 

•n 

if 

"M 












CM 

r- 


CM 


OJ — •-« 

o o 

aoio 

o o 

cm i» n 

CM f ® <~t 

a if 

CM 

CM 

o 

• 

pO 

H 

^ e-r •-« 




a 

If 

if 


CM 


n 


1 

1 


1 






CM 

c- 


! cm 



O J 


a 

If UJ 

►- 


i 



O *- lu 

O 

►. 

UJ If ‘ ►- 

Z 


i- 



a t- a 

z 


a uj < 

Uj 


z 

UI 


a x ~ 

►« 

If c 

3 if vf ►- 

X 


Ui 

o 


UJ *- 

T ' 

UI UJ 

i- ? z if . 

► 



X 

2> 

JM H 

If 

-1 

UCO UJ > If 1 

o 


►! 

o 

uj o u 

-J Z 


a a 

4 X - Q UJ' 

_l 


o, 

u. 

r —5 

►< O OC 

-J 

•-* X 

U.Ut-1 • o u, 

5. 


_J : 


r »- a 

1 Ui 3 

Bl/»M 

X 1 

z at 4 If X X 

X 

z 

S' 

X 

1 - u o 

►* u. 

33 J CC 

uj a 

Z 4 U UJ 1 If z o' 

UJ 

o 

X 

o 

> ^ z>a 

UJ 4 1 

Ol < UJ 

> M 

4*i-»« if UI 4 X 1 


►» 

UJ 

m 

a - o a 5. 

JUt 

l o 2 

X 

X 1 Z 1 - z o *- 

_j 

►“ 

Z 

4 

I-UZH 

<-> ►• UJ 

i»* 

X if 

1^3 HUiMM JO 

4 

4 

o 

_J 


»- ac ® 

Z XX 

O 1 

02!^ J c 1 ^1 iw 

M- 

_J 



3I2ZO 

K® X 

«-i lil'O 

•“ a 

lf4X,«42X>X 

o 

p 


. 

o o •-« o o 

UJ 4 S 

X X 4 

o — 

*-*xoVx<-*tv*-»X' 

►* 

a 

> 

> 

Z < X u u. 

l- U. -1 

X U X 

X 4 

X l *lJ|3ru,SSo< 


o 





1 


1 

1 


X 

u 

U 


272 


UNEMPLOYMENT RATE 6.0 5.3 5.6 5,5 4.4 
















BUDGET B BUDGET C _ . BUDGET E PTPPrf»rMr»"C OTFFFpFHCFS »? * 

LOW *50.« BILLION VEO *67.6 BILLION HTPM PULTON PFOCFMT OF TO* , * 

1) w CO mP COMP OjFf. UMCOKP COWp PTFF UNCOMp fOv-P JVjrF (1-7) ♦ 3-A) _ <5-P> . 0-7) (*-*) 


ACDA/E-156 


<v ir, ff., c c 


„ t ' i ' 

C a «, «.■ c <v <v cr X c.,tr of if 


CV — Ai 

e 


f. e 


t 


• 4 

r <V CV K (I r 

I - 

I 


| — - CV V 


« tv o 


<V «v cj 


IT C 
CV IP 


c cr c 

If 


O 

CV ' 

I. 

I 

O «£'«rc\tf<vtf!fc a r C; 

... 

ff NIT « tf P- 

t — e r 


l 


(i 


a C C r. X 


i 


I x - 
I I 


• — 
I 


<v p u r .T a. - if (i n - mi c eve 1 

IftftM' I C tf CV CV, CV - I I If 

iet- -tii'ii k 

• i i 


— «. 


i 


a: 

» 

r; 

7' 


? 


0 

a 

U 


it 

« 










f 

• 

e 

« 

cv 


C CV — 

— if — - 

c a c - 

«- 

£CClfAC«6 


X 

x> 

x 



i 

1 


t i 

i 

t 


- t 

•- 

F 

8 



CV 

C CV — 

- X — — 

C f C - 

•*- 

e c c 

1 

p-’ r r — ct 

c 

IT 

C j 

CV 

«*»* 


I 


S 1 

1 

t 

• 

t»-i 

11 

CV 

a 

l 

CVi 

C 

c. 

c — c 

C C H r- 

-1 X C CV 

I 1 i 1 I 

if 

— c c 

r — r c c. 

X 

p- 

CU 

X 

«— 

1 

1 s t 

tt«t 

! 

t 1 1 

e s $ i —: 

< 

X‘ 

X 

CV 





1 



1 

1 

i 


( 




C CV — 

r* lT r n 

— — c c 

r 

— e c. 

p r — c: 

c 

a 

Ifl 

X 

c 

t 

1 5 t 

ttii 

lilt 

t 

i.l t 

1 » - S 







1 




t 

1 

1 





K: 

p r. — 

(\i e 3 ioif| c ec c 

CL 

a: if p* 

cl cv a C a 

e 

r 

c- 

CV 

<1C 

X 

p K' 

— cv r c\ 

& \T — 

o 

if — 

x X p a r 


p 

ir 

in 




•r- 




CV CV CV 

X 


• 

X 










*« 

1 



X)P*X>Cvl»OlPXa 

»<V as c 


Clf> 

in if if o a 

o 

a 

x. 

<c 

P- 

X 

p n 

—• fv ir <v 

a if — 

cr 

if 

X X a. if r 

X 

X 


a 




•» 

( 

a-4 


CV (V CV 

X 

«►* 

i 

X 








1 

a-« 



—* 









♦ 

• 

1 

O 

• 


0 

0 

0 

0 

o o o c 

0 

C 

0 

0 

o 

0 

0 

0 

1 

0 

1 

0 

0 

a 

o 

CO. 


X 









1 

i! 



x. 

S 3 A 

p m if. 3 

r> N K cr 

N O' f h- r. 'AiT Ci 

X 

X 

a 

c 

IT 

X 

P fO 

n (\) »0 (V 

a a 

O' 

tf 

X X «. If fV* 

K) 

© 

a 

p» 








CV CV CV 

X 

<v 


X 








f 


a 




a P- a cvcoxxtoioe^cca' 

p* 

s fi r- ci j acx 

CV 

X 

r~ 

• 

o 

a 


p. r. 

— CV fO CV 

a a 

O' 

•tf -■* 

X X 85 if. CVI 

CO 

® 

a 

p- 




a- 




CV CV tv 

X 

(V 


X. 







1 


•»* 

a 


CP* 



Zt •-* o 

0. 

2. 

1. 

0. 

1 

o o o o 

r-l 

o c o 

!»•? H .1 C O 

X 


X. 

• 

rO 







1 



p—1 

i 

i 



if 

P X <v r X X a 

to x x 0 

p 

ff If. r~ 

X X p O 3 

c: 

P 

CV 

X 

OJ 

X 

t-- K> 

«~i CV >0 CVI 

a a 

O' 


x x a f> -v 

a 

r< 

a 

p- 








CV CV CV 

X 

CV 


X 





1 


1 


*-» 

a 

1 

9*H 


a 

1 

f 3, N f) in -f fO lO fl u y 

X 

® if) p- 

cv a r> o a 

ro 

p- 

p* 

• 

rO 


X 

K m 

•*« CV O CV 

a, a 

ct 

a «-< 

X X SC X) CV 

<V 

**S 






-4 




<V CV M 

X 

OD 

in 





2 

* 

► 

o 


2 

O 


Ui 


I 

3 

Ql. 


* 

Ui 

T 


a 

x 


CV 


<£ 

CV 


L* 


U 

u 

X 

c 

u. 

X 

o 

<£ 

<z 


> 

u 


4 


273 


vINEMPLOYM€NT RftTE 3.6 2.7 
















TEXAS TABLE 15 (continued) 


ACDA/E-156 


« tr C — 


If • 
m _ 

C 
if t 

u 

u 

a *- 
u ? 
u u. 
u u 
► a 
c u- 
o. 


4/“ 

U 

5 

«. 

u. 

a 

w 

u 

u 


a 


t 

i 

v 


c 

i 

o 


f- 

I 


u 

Z U 

c ft 
- c 


u. — 



u. 
z ft 

c c 


u> 3 

SSa 

8 * c 

§r: u 

f 

a 
o x 
u.- c 

X o 

z 

3 


ia. 

u. 
z ft 

c c 


ta — 

{r-S a. 

hi x 

JJsC 

5 • o 
aa Z 
f) 

* 



^ci'kiuxci 

*r 

c r <c <c c r. c. ft 

<£ 


r. 

if 

<t 


r 





• 

• 

m 

• 



A A 1 A r a A A 

C A C r- i> »> A IT 

r 

e 

3 

i 

ft 





1 

r • 


*v 



1 j 




( 


l 


• 




1 



♦ 

*<£0<<cir«»cro 

C 

3 0 A If A : «lf A 

if 

re 1 

ft 

3 

«- 

0 


a 








©i 



♦— 

tv. i tv tv a ® r t> 

c 

ft tf A ft — tV 3 

3 

ft 

1 

t 





1 

>3 1 


tt » 



^•1 






1 


i 



*1 




rA-«tV*-tVif3C 


ifoaftft-cft 

O 

c 

»r 

ft 

a 





• 

• *•••••• 

• 

• • 

• 

• 

• 

• 



13 1 | - UM 


1 Alf A ft A »■ 1 

s 

• A 


1 

«c 




t till 


If 1 I 1 1 i 


tr. 

i 


ft 





1 

1 


I 1 



i 









• 

• 

«* 

• 


tv. 

aC<fACA»-AC 

c 

cit s •- c *-a « 


ft tv 

3 

if 

r 

3 



1 

- 1 - 

p 

If 

1 

1 

r 

•* i 

r 




l 



I 

l 1 












• 




tv 

Cftllf — — — tv. — 

a 

ft If 

c 

« 


a 


*— 

1 


ft i a — 

tr 

«£ 

» 

3 


tr 



i 

• 


1 


1 

i 



c 

CilACCC^^^ 


crns—*-e tv 

ft 

— if 

r 

c 

if 

a. 



1 1 1 1 1 1 1 > • 


1 <V - 1 C 1 t 1 

» 

S <f 

if 

ft 

K 

3 




i 

i t 


1 

7 

1 





33ft— etV.fttV.ft 

IT 

C. ^ vC 5 ^ C 

•C 

ft c 


ft 

if 

• 

r. 


0 

1 t 1 1 t 1 1 1 1 

i 

1 1 1 1 ) 1 tv 1 

r 

1 

c 


c 






1 

i 


«a-» 

1 






3 if- 

IT 

<cifif«jjo 

K. 

r. o 

c 

© 


• 

3 


<C 

ft C. 3 ft 3 CV if If 

If 

— i£ tvi If 3 3 if — 

tv. 

c <\ 

r 


c 

I** 

• 


•* 9* <\ 


tv — <t (\ 

cr 

A ft 

A- 

If 


k- 








a 

















jsc ci{h 

0 

ftft©*inifiC<r 

if- 

3 mD 

3 

<£ 

3 


0 

ft 

ft tv if ft 3 i* - if if 

If 

— if A" if 3 3C(V 

if 

C ft 

•r 

3 

or 

tr. 

• 


— — (\ 


tv — a tv 

a 

ft ft 

3 

if 


tr 








3 



3 









•-* 





co-Hoceooo 

© 

©oceoatv — 


c c 

c- 

C 

c 



if 







1 

7 

I 



J « <0 C « C if, 

c 

ft 3 — if 3 if) ft. cc 

*r 

3 3 

or 

ft 

c 

a 

aH 


ft tv ® ft 3 m in in 


— 3 tv if J 3 C ft) 

in © a- 

cv 



c 

• 


<v 


ft »• SC. tv 

a 


fO 

if 


|A, 

























3 — - if * iC C lA >C 

-f 

ft 3 — if X if) © ft 

o 

3 3 

a- 

c 

a 

a 

in 

a 

ft tv in ft 3 tv if. ® 

3 

H3MAJ3D(VI 

_H CD ft 

H 

tv 

® 

iD 

• 


— — tv 

r-e 

a — c tvi 

O' 

f*- 

K> 

x 


m 

3 








«—i 


3 









^4 





«rg^)»>OHO«o 


l<"> 

-« a 


* 

t 

ft 


to 






3 

(V 

3 

1 









i 

1 




if oir i* 3 o if, ® 

3 

A~ 0 © if ■ 3 in if © 



ft! 

© 

ff. 

ft 

O 


ft "V jf> ft 3 to n _n 


^r>ftj/)33®o 

iO O 3 

ftl 

O 


ft 

• 


« H (\J 


CV. -< «C (VJ « A- 

tn 



PO 

3 







3 



3 



a 

n CA 

Z> ft X 

■n cr 3 X< eg ft ® 

® 

3 

lO JM) 

® lO ft 

ft 

3 

ft 

O' 

ex — ft ~«if: ft 

3 (V If) /> 

3 •-* m 


if 

3: 3 ft fV 

3 0® 

X 

tv 

tv 

ft 

3 O 

H H 

(VI 



<v 


® -v 

® ft ft 

N 

C 

<y» 

•o 

_t u 









3 

*— 


3 

z 










ft 



3 
















U.' 












3 

J 

a 

ft 


Ui 


ft 






o 

ft UJ C 

ft 

u 

in 

ft 


z 






a 

ft a z 

3 

X 

Ui 

< 


Uj 


z 

UJ 



a 

X 3 •- 

l ft O 

3 

»n 

m a- 


X 


Ui 

Ui 



f. 

U ft I 

uJ Ui 

ft 


z m 

ft 

>- 


X 

X 



2 t~ _i 

ft ft 1/1 

3 

u 

2 

o ui 

> m 

o 


>- 

5 


Ui 

O y J 

z 

u> a 

« 

X 

ft 

C Uj 

3 


o 

u 




C X 3 

ft Of 

u. 

Ui 

ft • 

© Ui 

a 


3 




i- C X 

uJ Z (T / 

► i i 

. 

X 

< if. X 

X 

X 

z 

a 

X 


A* 

u. O 

ft U. 3 3 

a uj a 

z 

< 

U UJ I 

in z o 

UJ 

o 

X 

o 


>* -I 

3 a ui 

« • a < 

Ui > ft 


* 

ft ft l/) 

UJ 3 la. 


ft 

u 

X 


a c o 

a a 3 

O X 1 <3 Z X 

X 

1 

Z ft z 

Ui >-« 

3 

ft 

z 

< 


*- u Z 

A» •■* 

M y H 

ft X l/l 


in 

3 ft Ui 

ft J c 

< 

< 

3 

3 


ifi *-• —• 

m c i- 

a x z x 

X O 1 

u 

z 

X J Q I 

> ft Ui 

ft 

3 




2 x z 

z O X 

X) X ft u 

u ft ac 

in 

< 

I - < 2 

a >x 

o 

3 

• 

. 


c o <-• 

o o u 

« 3 a I 

< o — 

i—e 

a 

O ft I ft 

aJ ft X 

ft 

a 

> 

> 


Z < X 

O U. ft 

u. j a 3 

X X 4 

X 

ft 

J 3 >- u. 

ft 3 3 


o 


ft 


*-• 









a 

Oi 

Ui 


274 


UU€MPL0r«KNT RATE 5.0 
















UTAH TABLE 13 (continued) 


ACDA/E-156 


I 

« r c' 

V —If 

ft>c 
bJ — 

uk<r 

Z Cr|‘ 

b IN. 1 

SS~ 

bb , 
uo — 
►* o ^ 
C b • 
Q. •-> 
**1 


V 

b 

Z 

bl 

ft 

b 

b 

b 


«r> 


a> 


- A 

«• •- 
I 

tr 


t i , i | 

*** " * 1 1 0 a <v h s ^ c k «- t y. >i k c A 4 
••*!•••••«»•••• •••< • ••••«< 
ait ftVAif «a Ucev-aer *->•-«s..r r. •> 

• 1 'l ” <M I A 

• I 


r-r c V ft aeAO, Aaif^ifAir < c < r c! 
• »•»•»««« • • • • ••«••••«! 
<m ^ eg r\. »*• a cm cr a po r a ^ a a a »*■ 
• 1 • 0. i r; 

t i i 


K-3 


7 


t 

^AACA^OAAC iKicr'c^rc; 
» l c e <m c •- * r cv *>..c - ir 

I I I - I IT l l |! I I I I ft 
II ll 


I 


I 


—' — c — «-■ c c e c c c 

* - I 

I 

<v. 


ACA^-CCCA^rC*- 
III I 


y 

I 


r 


C*<ecOCOCCr»CA»eCCHv|rc» — 
I I I I i I 

I I 

I 


V. 


*1 

« 

tVi 

I 


r,- 


CL 


•r, 


r — • «- 


i 1 


ft 

o 


c 


r-‘ 

i 


c tv c c c 


ecc c^cr(\ccc—c. — c- 


- 1 I l. I I l i l l i • i l l I i i i i i i, - 


0 

I 


r 

i 


b 
Z U 
C ■- 

-c 


OC--CGCCOCCCC — ceccg — rcc 

lll.llllilllllll.lll.il 


c <c 

- I 


r> 

l 


w — 
h tr 

Ul 

V b 
P • 

5 ” 
o 

ft 

z 

c 


c. 

s 

C' 

u 


c. 

» 

c 

u 

r; 


b 
b 
Z — 
C C 


O _J 

H £ 
W “■ 

8 b 

b 

ft 

a 

bl 

2 


c. 

}. 

c 

c 


a. 

x 

c 

u 


»r. 


ft o c- « 
— <\. •- 


M 


a ac e ftc-ft<ft«oa:obtr 
<\. (\ ♦- b A* C 


ft ft C O •» I 
•- fV. — 


m b <M »c c a iTf^u-fttTft ft: r» ft) 

cm <c •- k o 


oocoooocooocococooooe, «* 


ft n c- c — 
-< CM 


Al « N <->C 
CM 


ir^-iTftuiftKjr'ft 

cm «-* b f*» ft 


ft n C O h A AiNwCMOSif ft ft O' ft) b ft 
^4 A CM C*J b •-< N O 





• 

IT 

1^ 

ft! 

r- 

c- 

vC 


rv 

ft 



& 


** 



• 

• 

|J 

0 

ft 

ft) 

ft 


1- 


<V 

ft 



9 





«*■ 

w 

o 

•-* 



1 



c 


ec 

o 


CM 

CM 

ft 



ft 



' 


tf 

« 


r- 

o 

b 

CM 

<M 

ft 

00 


ft 


b 
b 
Z — 

o c 


0000c30©0'p00cj0&00.->0-<oc> 


cm 

I 


eg 


cC - 1 
_) 

H •- 

wi r a. 

\? * 
G ft o 
s • o 
* ft 
S 
ft __ 

* 9 

o o 
-I o 


ft) o c. — y 
CM -* 


«\,i£A*-OAI'. NlT 
'M M *4 


it if O ft N ft< 
ft »-4 h* ft 


JKIOO-NA^AHOMOhiTJ ft O' CM b O 

b — P- & • 


^ A 




<V ** 


ft* 

•-< 

3 

CC 

o 


.V 

<M 

ft 

0* 


ft 


o 

ft 


^0 b 
b <y 


b 

(V 

ft 


X *-* 


>• ^ 
a 5 
*- u 

i/i « 

3 Z 
O b 
2 < 



o 

-J 


a 

ft) 


bl 


o 

t-0 

aj O • 

M 

u 

ft) 

►- 


a 

K- 

a 2 

3 

% 

bl 

< 


z 

> 

* *-• 

ft) O 


ft) ft) 

b 


ft) 

UJ 

X 

Ul b 

b 

3 Z 

ft) ‘ 

Z 

>- _i 

K 

ft* 

-1 

o 

O O 

UJ 

o 

y -j 


z - 

u x 

< 

X «' 


b-K 

5 _ 


X _i 

-• a 

b 

bl »- 

• 


C 2 

u. 

r z fti 

>- Z 1 


X < ft 1 

X 

U 

O 

K- 

b 3 JKUJa 

z 

<OU 

1 ft) 


C a 


3q:uj< 

u m 


z z 
*- o: 
s <J l 

i 


a._iwxio2 zz 
— n 
z o 
u >~ 

< o 

X X 


> Lft 

sg 

z o 

b. 


OKSItZI, 
O X O X •-« b< 
O UJ < O X X 

U. ►” UL _l Z J 


I ?,►* z o -* 

l/l 

I O Z * - JO I > « bl! 
a:ui«X«<Zoc>* 
*-»»■’ x OiK ac«ui"*x 


Ul 

X 

V 

o 

a!. 

X' 


-1 

«r 

b- 

o 


I 

v 

o 

_> 

¥ 


- 


bJ 

U 

a 

o 

b 

Z 

o 

3D 


Z >i > 

o «< 
Z u u 


275 


Ui'itMPLOTMhNT KATE b.l 5.(3 i>.^. _S.6 **.0 *>.p 














ACDA/E-156 



• 

Cf 1 

cm Cj r.'c. r f r > c if 

K — 

— ft- C.jr. —vt CM *C; 

«£ 

«■ 


lf> 

t 



• • 

—! — 3 ft - © ' 

• 

• 


• 

t 

«.«• ci 
t 


cm 1 *- cm'*- r.V. <m cm 'ft- 

tv. m 



ff 



i i 


CM 



1. 



IT 



! 

t *1 




| 

1 

c 










» 

u 

3 

i.osicMfefteft 

CM CM CM 3 3 CM ft". V 

' 1 

3 <C 

CifttfiftlfftCi 


vC 

vC 

u- 


SST 


K' C 
CM 

— — cm if a ft- 
»<- 

i 


C 


i 

U- ft 

Cr ft* —• 

kIZ 


; ! 

* i 

1 

i 

J 1 



*! 

I 

i 

\ 


U k 


it.. a: Ci k. m (\ j r^c'a 

CM s£ 

ft- v£ CM C ft - — 0 CM C | 

c 

OL 

H 

CL 1 


IlC — 

ft- 

4 • 


• 

• 


c* 


»* © r* 


I CM v- 1 1 ft- 1 CM C\ r CM 

- CM 

ft - «M CM CM — - 1 1 ft i 



If 1 



Cb l ! 


II 1 III- 

8 cm 

1 1 i 1 1 I ft - 

t 


C' 



a — 


1 

1 

1 



~j 


i 

1 





• 

I 

1 

m 

•r 


\A ~ 

ft. 

cccccccc c; — 

c c 

CCC OCC — CC' 

•4ft- 

CM) 

** 



k «• 


1 1 

1 

t 



• 



b 

a 

Ui 

u. 

U 


I 

If 


ft 


cccecc'<vcvccc.c«-crcc 


•- •“ 


►- 

IT 

e 


— c 

ft —- 

i 


CCCCCCCeCCMCft-ft-CCCCiCCCC! 
I I I I I • I I I 1 I I I I I I i I • I I I 


lT 

I 


>£> — 


a 


o 

x 

a 

u 

> 


u 

2 U 

c - 
*-c 


U _i 


*o 

I 

a 

H (t 

g 0 

cH 

3 * C 
S ft- b 

M 

6 

O 

u 

o 

(ft 

X c. 


C 2 

H 

— C 

IM 

2 CJ 

•J 

« 


u 

U vC 


CCCCeCCCCCCCCCCe— CCMCC if 

i I I I I I I I I I I I I I I. I I I I. I I 


f- »-ft- 3 CM ft- if". 3 CC Otr 3 vC CM CM ft -1 If 0 CO — 

CM — CM ftf n 


c c 

u d 

yC a if> 
S 3 

“ vC c 

s • u 

ft' 

X 

«ft 

c. 

or 3 

uJ C 

} o 
z 


c 

I 


r*- a 

ft- * 

— 3 


ft«NJNftif»oocK)3>cirMOif)oe*< <\ cr, 

cm — cm a c\ a vC 


OOCGGGOOGC OOOCC COCOOO o c 


CM 


IT 

a 


IT 

cc 


c o 

I I 


fft — ft- 3 CM K U*. 3CC.CiC!jCfti!ftlf:ir. C <£ — <t C. «C <£ 
— — CM 3 CM ; ft- ft- . ec 

ft- 3 *— 


ft-ftaftM/'lOtCIft^iCftlftnciulOftrtl rr o •c «© 
— — C\l Jftl ft ft ® 

ft- 3 — 


u. 

2 ~ 

o c 


*o 


OOOOOOGOOOOOOOQOOOftVQO 


CM — 


CM O 

I I 


S»_J 

I2xa 

^ 3 C 

5 ♦ o 
sa a 
.1 

3. 

1 2 
o o 
-I o 
2 


'M 


ft- - ftaM'ifjoioi r . 


3 iC CM CM ft-/ If• O K — 
CM 3 CM 


f- ~ NJNftlOJO* 3 fO 3 JMMflflOcCH 


CM 


3 cm 


c 

r«. 


ft* 


c 

3 


ft- 

3 


%c «c 

*> 





o 

_J 

a 

in 

UJ 


►- 







o 

— UJ o 


uj in 

ft- 


2 


*- 





a 

ft- ^ z 


X UJ 

4 


U) 


2 

ui 



IT. 

a 

K _ — 

m 5 

x> in in> 

ft- 


X 


UJ 





UJ — X 

UJ Ui 

ft- 3 Z 

in 

ft- 

>- 


X 

cr. 



2 ft- 

_i 

ft- in 

_j 

o o o, 

UJ 

> in 

o 


>- 

o 

UJ 


O MJ 


2 ft- 

o x 

C X ft* 


O UJI 
o u 

• x; 

_i 


o 

u. 

X 


— X 


2 X _) 

ft- X 

U. UJ k- 

e 

a 






t— 2 

3 

u:nr>- 

X 1 

z x <r in 

X 

X 

▼ 

a 

a 

K 


u o 


ft- u. D _i,<r 

UJ CL 

Z<UUI 

1 

in 

m 2 o 

UJ 

6 

X 

o 

>* J 


2 X 

Ui 

< 1 1 < UJ 

> *- 

«c » * •» 

UJ «C Ml 


i 

CD 

X X 

C 

x a 

-J 

U X 1 0,2 

X 

X 1 2 ft- 

2 

O — 

-J 

►— 

4 

— O 

2 ft- 

ft-4 

M U ft ft M 

x in 

in z «-* 

oT 

►* JQ 

< 

4 


-J. 

in — 

»-4 

vn c 

H- 

X X Z X X 

O 1 

O 2 X _J 

> ft- UJ 




o a 

2 

z o 

X 

® X ft- Ui o 
« r x x < 

ft- X 

in « x •-* 

< 2 

X > X 

o 


* 

• 

c. o 


o o 

Ui 

O ft* 

►- a o, ft- 

X ft- 

UJ ft- X 

ft- 

a 

>, 

> 

2 «S 

2 O , U. 


U. JlOT 


X ft- oi D ft- U. 

m o 4 


o 


**< 

— 






1 




X 

u* 

U 


276 


f 


UNEMPLOTMFNT HATE 4.3 3.? 3,*S 3,2 

















VTPGXNTA TABLE 15 (continued) 


ACDA/E-156 


I 


« IT 

« 


1 

V • * . 

< _J 

fc ‘l 

c 

1 

y c 


u 

3—- 

(J u 

«c 

z j5 

1 

u 

cv 

a *- 


U 2 


u u 

1 

u. c 

*- 

►* tt 

y 

c. u 

i 



i 

y 


u 

a 

u 

l 

2 

y 

u. 

^3 

e 


u 


u 

3* 

u 

a 

*- 

l 

c 

«v 



t~ 


y 


c 


►- 


u 

i 


—■ ir 


a 


— r 


»■* c 


2. u 
c >- 
— c 

•J 
w *- 

y 

x a 
c i 
»- c 

X CJ 
2 


u. 

u. 

2 *~ 
c c 


CN 

y cvjo 

X 0 


l 

O 

d 

c- a 

r 

c.tr 

c r. 

« r 

X. 

0 


i 

49 • 



• • • 

«t • 

• 

* 

» * 

• * 

• 

• J-m 

• » 

• • <* 

•» 

• 

* • 



CN 


r r 

CN 


. y 

^ c 

i 


<n r 

r 

c 

•i 


X. 

* 






c 






CNJ, 


s 

t 








l 


1 



‘I 





t' 

« 

^ iro 

C 


o y 

C h 

y 

y cn y 

y y 

y y 

c 


1 

2 

C^' 

<v 


• ^ • 

• * 

* 

• 

d • 

• 9 

• 

• • • 

• • 


• 

• 

r* 



CV 

<M CN. 

jt » 

|T 

K" 


CU 3- 

i 

- 1 — 

CN. » 

3 

r^' 

•— 


*j! 

i 



* 




!»• 

<•« 





y 

M 

M 



1 


• 


» 

1 


i 

i 



»i 


• 

AC <|k 

o - 


C 

«o c 

CNJ « 

CN. 

1 

IT ^ & 

«cr 


C| 

c 

c 

i 

CN* 

*£ 


• * • 

• <V 

• 

• 

• • 

• • 

• 

• • • 

• • 

• <♦ 


• 

• 



1 

CN 1 

I 

CN 

r 

- 0 

1 a 


CN C\ — 

( i 

1 1 


a 


<v 


• 

1 


1 

• 

t • 


« 

i 1 1 



y, 

9 

1 

Cl 







» 

9 


1 



< 


1 


— 

c cv — 




C 3 

C 3 

c 

1 

c cc 

x. y 


I 

CN 

ct 

a 

3- 

• 

C 






! 

e 

I 




3| 


y 

1 

C. 


j 







i 



i; 

l 

i 

! 


• 











\ 




m 

c\ 

c r.« 

r. 



c y 

c tr 

«r- 

n 

0 

n 

y 3 


y 

y 

CN 

X 







8 

9 

1 




y' 

t. 

C- 

I 

CN; 












•»t 

9 

1 










i 



J 

• 

• 

C 

J 

• 

C 

C Ht 

c c 


«e- 

—■ y 

c r- 

if 

CN C C 

CNJ C 

rv. c 

K 

C 

K 

X 

c 

1 

* *! 

1 

» 

i 

i i 

« t 

1 

1 1 t 

1 1 

i i 

y 


y 

y 

y 


t 

I 










i 

t 

i 


• 


O (V r* 

-i CN. 

CN 


•— •— 

c — 

<\ 

0 

0 

l 

c- y 

CN *- 

CL 

*- 

CL 

r. 

Ow 

9 

« i t 

< > 

« 

) 

i i 

1 t 

i 

1 t t 

i i 

- t 



y 

y 












9 


I 




















• 

3* 

3 oj y, — y 

o x 

4J- 


X a. 

3 

r o 

CN. X ^ 

CNJ 

a. 

y 

0 

o 

y> 

X 

y 

c- y y x 

3 CN 


X 

K" 

c 

X - 

- a <x 

CN 


a 

c 

<£ 


c 


3~» 





3- 


CN 



3* 

e 

CN 


0 













CN 

y 




y 

3 y 

y cm r- 

cnj r- y 

y 

X O' 

r- 

a O'" y 

cnj e 

3 O' y 

c 

c 

c 

X 

y 

c 

y y- x 

3 cn. y 

X 

fT 

c 


c o 

y •-> a 

X. 

y 

CN. 

a 









y 


c 

CN 


a 











CN 

y 


•■M 


ooooooooocoooooo*^o«oo 

y 

y 

o 

y 

. » 



9 

» 


cc 

y 


o 

S 


ce a 

5 
X C 

• O 

x 

y 

a 
a x 

u' c 

2 o 
2 


<NJ 


3 3 y CN 

« 


X 3 C 

x y. 

a- 

X O' y CNjOlAfr 

y 

•31 

39 

c 

a 

y 

o y y 

X 

3 

cv y x 

y 

o 

X 

O Gh lO 

3 

O' 

cv 

X 

cv 

• 

3- 





3“ 


y y 3 


£ 



C 

*r. 




1 







X 


•4 


3 3 y CV 

r- 

34 

X 3 O 

sC ^ 

3 

X O CNJ 

— c cv cr 


X 

X 

O' 

X 

X 

o y y 

X 

3 

cv y x 

y 

o 

X 934 

O ij 1 )T 3 

3 

X 

34 

X 

CNJ 

• 

3-4 





3- 


y y. 3 

3- 

O' 

CV 


O' 

y 

1 



i 






34 

X 


«34 


0. 

1. 

0. 

0. 

3-< 


o o o 

o o 

o 

•*,0 0 

y.*</ o 

o 

X 

*-4 

0, 

X 





• 






r-4 

934 

i 



s y x y 

a. 

39 

X 3 C 

x y 

3 

say 

y. «-n x c 

cv 

X 

« 

X 

Cw 

^3 

o y y 

X 

3 

iv y x 

fO 

o 


o T O 

y 

X 

C5 

X: 

y 

• 

39 





3-9 


y y 3 

•31 

O' 

cv 


a 

y 




* 



♦ 



934 

y, 


4-9 


3 3 y C4 f*- 


X 3iC' 

o y 

*o 

r~ z cni 

•JOtua 

CV 

3^ 

'0 

X 

X 

3 

o y y 

X 

3 

(\J A if. 

y 

O ‘X H H 

o cr y — 

"1. 

r- 

O' 

f' 

cv 

« 

y-4 





H 

• 

y y 3 


O'- 



O' 

K> 










139 

y 


34 



u 

X 


X 


2* 


V _J 
X 3 
►- u 

X —• 

3 x 

2. o 

Z <t 


u 
■> 
IS> X 

2 *~ 
—• X’ 
2 Z: 
— D 

X -J 


LJ 
O -J 
O — 
X t- 

a x 
uj 
_j »- 
.j 

_ c 

2 X UJ 
O K 
X UJ < 
i JU 

—• y4 

OhI 
O X C 
O uJ < 
x *- u. 


UJ o 

a z 
2> - 
K x 
«-• 1/1 
2 *-» i 

X -i 

Xi X X >• 
u. 3-ia 
I CL 
X i 

UJ v- « M 

X Z X!X 
X •-« uj u 
3at|< 
JIOI 




z> 
i/I c 

UJ UJ 
-J 

u X 

— a 

X I 

u a 
> *-« 
x 
x x 
o I 
►- X 

o ~ 

X « 


x 

UJ 01 

a uj 
x y. x 

t~ O 2 
woo 
< x « 
u. UJ 

X' a «i y 
2 4 O UJ 

«r x w,w 
X I z't- 
1 /iD" 
u> Z X -I 
1/1 «* X ■ — 
•i X o *- 
X <- UlD 


UJ 

h- 

< 

\r~ 

i r 

UJ 


a 

l 


> x 

O uj' 

o o, 

X, 

. y 2 o! 
y ui < u.! 
Z X ~ 
uJi-ix JO 
3 I > •* uj. 

« Z X > X 
x —> X 
f~ x x (j <| 


T 
UJ 
X 
>- 
o 
— 1 
a 
x 

UJ 

-j 


z 

u 

X 


2 

o 


X 

o 

a 


u. 


UJ 

o 

x 

c 

u 

X 

o 

X 

4 

_i 


> 


277 


UI4EMPL0YMFNT RATE 

















rf^MlW.TOM TASLZ 15 (continued) 


ACDA/E-156 





« «r« 
v *tr 

* r 

V c 

u — 

U cv 

a *- •*' 

u, z 

U Ik 
U © - 
► ah 



U 
2 U 
C — 

-c 


UJ 



x a 

ex 

»- c 
X U 

I 







u 
u. 
z — 

oc 



X 

« 2 


oo 

-JVJ 




ft ©lev If. c 

r © 

ft r a 

ft « ft c r « 

99* 

c »v 

1 

1 

l ^ 

r. 

°u 

l 

r 

• 

• • • • • 

• • 

a* • • 

• 

• 

• *1 • • 

• 

• 

• 

H 

• 

• 

1 • 

•* 

cv 

•» ev n r r 

ft ft 

•* 

ft 

«• 

€ft- CV 

m 

ft 


o! 

- 

(ft 

cvj 

I • 



? 


! » 

r 

s 





cv; 

1 

l 

1 

1 



• 



l 






1 



1 

1 



ir e « a > 

« a 

o - tv 

if 

« 

ft -ft ft 

cv 

ft 

ft 

c 

CV 

ft 

a 

ft. 

© 

• 

• • • • • 

• • 

• • • 

• 

• 

• • • • 

• 

• 

• 

€ 

• 

• 

* 

1 • 


tv 

► r ft aa 

tv r> 

© tv 
■ » 


tv 

— — cv ft 

ft 


h- 

cv. 


ft 

1 



l 


ft 

>1 





ft 

n 

» 





1 



l 






• 



1 

1 


r 

c\. o;*» e 
• • • • • 

ft ft 

ft ft ^ 


c 

c — cv - 

o 

c 


e; * 

ft 


ft 

r 

• 

• • 

• • • 

• 

• 

• m • • 

• 

• 

• 

• 

• 

• 

• 

• 


i 

©• • -1 

ft r 

tv ft 1 

9 

ft 

ft r cv - 

i 


t 

ft 

if 

©- 

c 

• 


i • 

l 1 

1 - 

ft 

t 

l l t l 


1 


ft 

i 

1 

ft. 






1 

i 






• 

j 

1 


1 

1 1 

tv 


c — c c c 


c cv c 

c 

9* 

C CC 9 

cv 

ft. 



© 


CV’ 


•» 


i 


l 

i 

cv 

1 






•ft- 

a 

1 

1 




• 






1 

i 

i 

1 

1 



Cft^CC 


C ft c 



C C C ft 

ft 

c 



ft 

r 

tv 

ft. 

** 


1 


. 1 

tv 

1 



ft-* 


tv 

tv 



1 





1 

1 






i 

l 

• 

1 









_ J T _ 




1 

•l 

I 

• 

• 

1 

M 

•' 

e 

c 

c — c c c 

— c 

C. ft c 

c 

s 

— c c cv 

c 

cv c 

999 

ft 

9 

tvJ 

ft 

«x> 

i 

1 1 1 i 1 

1 i 

1 1 1 

cv 

(j 

till 

I 

» 

1 

cv, 

, ft 

a- 

©■ 

1 






1 






1 

1 » 

i 





— c 

tve 

c c 

f\J •• 

c 


C 

*r9 

tv 

99 

C 

c 

ft cv 

0 

99 

c 

c 

c 

© 

9" 


0 

. 1 l 

ll 1 

1 1 

i. t 

i 

i 

1 

1 

i 

1 

. i 

t 

• < 

i 

1 


cv 

• 

1 

tv 




ft ft 

ft- tv 

9* C 

a- 

•■4 

I r, 

a. 

CM 0 

ft 

ft, ft Cj © 

C 

ft 

to 

© 

tv 

ca 

ft 

<c 

ec 

ft 

ft CV 


a — 


ft 


ft 

ft 

© 

o- 


C If 

•— 

ft 

ft 

tv 

J 

ft 

99 

9 














C\ 

tv 

CV 


tv 


1 

cv 

9 


















•— 

ft 

















4 










ft ft- 0 ft 

— © 

ft cr 

99 

© 

ft 

a 


ft a 

ft 

r cv © 

ft ft) 

© 

tv 

o 

ft) 

a 

ft 

ft, 

ft CV 

999 

a — 


ft! 


ft 

C 

9 



• • ft 

CF- 

ft. 

ft 

© 

© 

tv 

09 

• 














1 « 

cv tv 


tv 

o- 


tv 

tv 


















•-4 

ft 





© © 

c © 

o c 

cr c 

© 

© 

o 

© 

© 

o 

© 

o 

— c 

-»© © 


© 

tv 






















i 





ft ft 

SC ft! — © ft tt 

~ — tr cv « 

ft! ►•. 

ft ft. <v 

© ft ft 

*9 


c 

ft. 

© 

ft) 

ft) 

ft tv — © — 

— to ft ft 

» — 

©H J*} 

— ft) uO 

© 

0 

ft 

9*4 

• 






tv 

tv cv 

tv 

#• 


tv 

a 









ft 


©■e 




ftft«ft) — ©ft® 

— — cr cv © ft ft> 

ft tv tv 

«.f^ ft 

ft 

99 

tv 

* 

9^4 

a 

ft) ft cv — © — 

— ft) ft ft ® — 


— ft) ft 

© 

© 

ft 


• 




cv 

cv cv • 

99 

99 


tv 

r 






9*4 

in 


m4 



ft> 

00 — 0 © c —© 000 —oooocv — ©oo 

12. 

O 

9*4 

94 

1 

99 



c 


3 tft - © 

ft © 

ft— 

a. 

ft c 

ft 

ft. 

ft 

© ft, — tv 

0 

ft 


K. 

O 

tv 



ft V — 

© — 

ft -4 *0 


© ft 

© 

-4 


— ft cv -» ft 

© 

<0 

0 


• 












tv tv tv 


© 


<v 

ft 




i 









•H 

fti 





0 

p» 

ft ft) — O 

ft ft 

— 0 

ft 

ft r* 

ft. 

ft) 

ft 

i 

tv fg h* C* "V 

tv 

CC 

—4 

(V 

© 

«-4 

IT 


ft tv — 




© ft 


9 "4 


— ft — ft) ft 


CC 

ft- 

-4 

• 












*v tv tv 


0 


tv 

ft 













•• 

ft) 


W 4 





7 

U. o 
* - 
. 0— 
»- u 
V ^ x> 
x 3 o a 

►“ U X — 
ft — ft 
3 X 2 X 

o 3-c 

2 «* * j 



UJ 










n j 




X 

ft 


UJ 



0 — 

UJ © 



— 

UJ ft 


— 



a — 

a 2 



3 

2 UJ 


4 



a. x 

5 — 



ft © 

3 ft 

ft 

♦- 

t 

ft 

UJ 

- X 



UJ UJ 

»- 3 

2 

ft 

— 


-j — 

— ft 



-J 

u Q 

O 

UJ 

> ft 

y 

-j 

2 — 



u a 

«f I 

99 


Q Uj 


— 3 




— 5 

U. UJ 

3 x 

K 

• 

O v> 


Z U. 

- s 

ft 


X 1 

« v/ 

X 

X 

0 

►- 

u. 3 

-J 2 

uj a. 

2 < 

0 UJ 

T 

ft z 0 

tx 

UJ < 

• ^ 


w 

> — 

< X 

9*9 99 

ft 

UJ 4 U 

i. 

-J 0 

2 1 

u' 

2 

X 

* » 

5 K 

2 

U — 



UJ — 

— 


X ft 

ft 


iSf 7 

N JO 

a 

*- a 

a, z 

X 

X 

0 1 

VJ 2 

i -j 

>-u 
a >1 

0 

x ® 

I - 

W 


ft < 

X — < 2 

0 

u < 

3 X 

X 

< 

0 — 

— a 


X — 

U - X: 

u. 

— 'V 

-»x a 

X 

X < 

x - 

O' D 

— u. 

ft VJ < 


n? 


>• 

o 


s' 


X 

UJ 


~l 

< 



278 


UNEMPLOYMENT P*TE 
















*F«:t viRPJNIA TABLE 15 (continued) 


ACDA/E-156 




If 

• 

« If 

« 


«v 


• 



U • If 



C _ 

W 



c 




if i_ 



« 

L 


O 

• 

o 4. 



Cl 

z c 

n* 



u 

Cl, 



a a- 

-_J 



Ui z 




U U. 



If 

u o 


r 

9 

— e 

A 


9 

c u 

1 



a 

0-4 







if 


c. 

c 

u 

c 



u 

1 



« 

If 



Uu 




c 




u 




u 

»»>» 

•— 

c 

u 

« 




1 



c 

ci 




Wl 



A- 

» 



If 




O 


c 

c 


A 


* 

u 

1 








%•» 




u 


c 

2 

u 

0 

1 

C 

*— 



w j 

c 




H - 
W 

r a 
r. c 

5 * 

X 0. 

c > 

•- c 

X o 

z 


> • • • • «- • 

f- - *c r c\ «v 


»<r — — •• 
- J 
i I i 


*' • * • • 

—i — <\ 3 ir 


i 


o 

11 


* cj » 4c Jso'ocsaif-^iftC r c, 

* ® * • • • 

. A A >C A AIT 4 hi 

— — I *rl 

i ' ' •! 


^ CN. 3MT fS‘ * r - 


I • 


9 I I 


- - t 

I I 


I I I I I I 


p~. 

9 


C •- C C C CCC «-C^^CCCA»-3CC 


I I 


I I 


C C. IT — If 


C C 

I I 


let ii f i i, t i > i t i: • i t 


c c 


CO *- fa C AAlCiifitfJCAANCNfCO 
tt — — CV — — <\ — <£ CV — C — C C 


Co *h 3- C CO <M CAA J 3 ^ 1 t A 
A — — O — — A « \£ A 


oAirff h 

— — CO 


a 


ci 


l 

i 


%c 

i 


c 

A 


at 

Cl 


a£ 

■X 

lf 


— 3 


x 

\f 


a 

f- 


t'. 

» 

31 

7 




- - SC! 


•I 

M 


3 *- 

A- 


I 


A 


C . 

*1 


7: 


A 


«C 

« 

If 


m 

a 

If 


CM 

IT 


Co 


u 
u 
z — 
c c 


CCOOOC COC COOOCCCCOCO— Co — {V C 

I t i 


h& a 

W 5 

^ U c 

3 • O 

3^; 

<0 

«A 

a 

o T 

Uo C- 

* o 


CO—■ 3CCI.CI.a\L'£.33afa — A-A-C.©A'3C«-> CM 3 \C — A- 
X! — —a CO —a — A —4 nC Cj —a —a —a O C' A* X —I X- • 

— — IT A- If A. 


(V H3C«NCiaCJJIfl-AACffAJ?*a 
—1 —a CO —« —a CO —< >0 CM — 0 — 00' 


O 

A- 

X 


If 

X 

A- 


«C — 

—* o 

fa 


u 

Ll 

Z — 

C C 


o ooooo oooooo — ooo—«oc,o — 


r) 

I 


A- 

I' 


O 

I 


«a 

H-C 

0*0 

£0 J 

SI 

*» 



c\ fvr' cc^sC if^U' 

o 

a 

o o 

^ tr 

0 •-» 

f 

c 

“U 

H H H ^ 'N* #-• 

J) 

CJ 

H -H 

— o 

O' 

A- 

X 






— 


Ifa 

A~ 


O 

IT 



CO 

•H ^ O 

CO \i 

S3 O Si 

a a si 

O A- A> O 



3 

T- — 

A- 

o 

00 

CO 

< 3- <-* cH 

(V H 

— 

CO 

•N 

C A — 

o 

—< O 

O' 

aO 

A- 

Cal 

a 

o o 









H 


n 

A- 


if 

-J u 

z 


1 


1 

1 


, 




i 

i 

a 



1 

a 

1 





lu 

1 


1 




; 



a 





O _l 


CL 



Ui 



>— 







o — 

Ui o ! 

M 

U! If 


— 



z 


*-| 





X *- 

X Z 1 

3 

a uj 1 


< 



Ui 


z 

Ui 




a x 

D- 

ui O 

3 if cf, 


t- 



z 


to 

Ui 



If 

hj 

a— r 

Ui u 

*- 3 Z ! 


If 


b- 

»- 


f 

X 



Z !- 

_i — 

«M f. 

-1 

U o o 


UJ 


> If 1 

o 


>1 

o 


Ui 



z —• 

u x 

« X —i 




O Ui 



o 

u. 


X 

— 5 

- a 

X _i 

—> X 

U. UJ *— 1 


• 


o o 

a 






»- c 

Z oJ 

3 X f? 

>- r « 

_ X sf 


X 

1 

X 

X 

*» 

X 

X 


— 

o o 

A- 

U. 3 _i 

a u a 

Z < OiUi 


• 

If Z Ol 

UI 

6 

*1 

o 


V J 

Z> X 

Ui < 

1 X « 

Ui > *1 

<1 1 MH 


£ 

Ui < u. 


—a 

W| 

a 


X - 

oxo. 

_J u 

X 1 u 

2 X 

a i £ a* 


z 

a 

—a 

-J 

— 


<* 


— o 

Z A- 

M — 

UJ — M 

— X l/> 

m 5 - 

it 1 

— 

— 

-i c 

<4 

< 

5 

-i 


f> — 

«t/)C 

»- X 

X Z X 

X O 1 

U Z Z -J 

3 

1 

> 

« to 

►- 

-J 




3 X 

z z o 

M CD 

ThUUKS 

If < X — 

< 

z a 

> *1 

O 

3 

« 

• 


2 o 

— CO 

u «t 

3 X t, 

< o •-• 

a-* X 0 , 1 - 

X 


Ui 

— a 1 


X 

> 

> 


z « 

t j a. 

— u. 

J1U 

If < 

* fub 

A*. 

JL 

f O <1 


o 


*-* 


— 





1 





1 

a 

U>, 

u 


279 


UNEMPLOYMENT MATE 3,tt 2,f> 













WT^CONMN TABU: 15 (continued) 


ACDA/E-156 


« if ft 
I 

if •¥. 


* f 


If L 

! 

u 


u u. ci 

7 C 

• i 

u 

tv 

a 

—* 

U- 7 


U It 


It o 

— 

•ft o 


C It 

I s 

a 

•ft' 


ft 

if 

ft— 

u 

a 

t 

1 

7 

c 

u 


a 


u 


u. 

*■* 

u 

cc 

►- 

ll 

c 

tv 

»- 


1/ 


0 

.— 

►— 

ft 

u 

i 


U 
i u 
c •- 
«- c 


w — 

a 

c. 

c > 

• c 

ft o 

o 

¥ 

z a 
e a 
•- c 
z c 
z 


u. 

u. 



£ I 
¥ 

a. 

O X 

uj C 

s u 



pa 

H 

U) 


pa 


n a. 

'JL 

3 O 
• O 


0 

f> 


#• 

i 

ft 7 

o o 

-J u 

z 



tv«c in|ft ©if 

9 

a.«'»" 

tv tv r:'>>c 

Cift 


CC 

tv £, 

If. 

3 

a* 

ft) 

c. 








r. 




•) 

• 


A AMV. tf e 

A 

Cl ff 

ft a 



w 

tV 3 

0 






• 1 

1 

1 


I 1 


l 

* 




t\! 



^ • 





i 


1 




1 



i; 



1 

« c c e c r- 

C 

3 X c 

0 tv 

a 3 

1 

¥ 

£ - 

c 

1 

tv c 

£ 

If 

f 

ft 














if- 


•*- 

tv fti tv, tv, if if 

rr 

i»- i"- 

ft- a 




tv If 

3 

ft. 





•i 

| 


1 *-> 


1 





ft- 







1 ' 

1 






1. 



i 



irc-'iiC j 

a 

cc ft 

£ £ 

If — 

•"» 

cr 

ft- cv 

tv 

t 

cv c* 

«r 

a 

£t 

ft- 

ft 

. . ft . . . 















i a - i - i 

ci 

<\ <\ ir 

-- ft 

£ ft 

ft 

t\ 



1 ft-. 

r 





ll i 

1 

l » - 

1 tv 

1 1 

J 

i 

1 1 

1 

ft- 

i 


r l 





i 

1 






1 : 

i 






i 


» V . 





£ tV 


1 





tV 

(V C tv — C — 


— c » 

ft- tv 

tv c 

c 

c 


c tv 

Cf 

a. 

£ 

If 


1 


'*i 

1 

1 







3 — 

ll 

1 



AC A "C " 


-■ c a 

tv ft 

ft c 

c 

c 

« ft 

a 

•"* c\ 

c 


ft- 

If 


1 


i 

1 

1 





1 

i 


tv 

1 


C 

c c •- c c c 


" C If 

•- r 

C r- 


c 



i 

c tv 

If 

If 

1 

3 ' 


«- 

1 1 1 1 1 1 

• 

1 1 O 

i i 

- » 

1 

1 

1 1 

» 

1 1 

If 

r 

£ 





1 


i 






1 





AC A "Cr- 

•— 1 

tv C If 

tv c 

IT 

G 

G 

a rr 

tv 

1 

G 

£ 

£ 

O 


c 

1 1 « 1 I 1 

) 

1 1 1 

1 1 

l. i 

1 

i 

i i 


1 














1 


1 


i 



it n vO n if, 

in 

if cr if 

IT 

ft a 

£ 

3 

CO c 

tv 

£ ft- 

0 

m 


If 

a 

ft £ 5 — 

(V 

ft- - r- 


If 3 

•- 


at if 

N 

ft- 

X 

ft- 

© 

a 




•— 





tv 

tv 

tv 

If 

tv 


£ 













3 

i 

i 



MT Ct Af iC 

* 

ft c o 

f j If A 0 

ft 

3- 

£ — 

3 

£ ft- 

3 

£ 

it 

tv 

ft 

ft- £ a - 

tv 

ft ft ff 


£ 3 



O' £ 

<r 

ft 


tv 


a 









tv 

tv 

tv 

£ 

tv 


£ 












tft^ 

cr 

i 



0, 

0. 

0. 

0. 

0. 

0. 

o 

O O ftft 

© c 

— © 

C 

C 

o 

H 

© © 

if) 

m 

© 

• 

o 

£ 










, 


i 

• 

1 


ft ft © ft £ 


£C — 

Og >0 

l/l © 

£ 

3 

CT 

m 

£ £ 

ft 

3 

a 

G 

if 

ft. vO 3- ft* 

rvj 

ft> "ft £1 

^ -H 

Ji 3 


V* 

a £ 

« m 

o 

£! 

3 

X 









tv 

tv 

(V 

£ 

tv 


£ 






























« 


Mf N,ft« |£ 

3 

£ O G 

tv m if. cc 

£ 

3 

fTj 

tv 

£ £ 

Cvj 

3 

3 

C 

3 

ft £5 or -ft 

<VJ 

ft) "ft vO 


If 3 


e-4 

O £ 

CC 

ft) 

o 

IT 

if 

X 









CV 

tv 

<V 

£ 

tv 


£ 







l 





•-I 



¥-4 


O *-4 O O 

o 

^ o 

ft* o 

CM "ft 

o 

0. 

3. 

1. 

*f. 

o o 

o 

O 

tv 

• 

ft) 

ft) 











tv 


CM 

1 













i 

i 



ft »n cc tv ft a. 

3 

ft O ft 

ft-, tv 

3 ff 

£ 

cr 

£ tV 

£ 

£ if 

0 

3 

ft 

o 

VJ 

n- j 1 j -• 

<AJ 

fti -ft r> 

3- -4 if) 4- 


•H 

> £ 

•o 

■O 

3 

f> 

3 

X 




•H 


•H 



tv 

cv 

tv 

£ 

tv 


£ 













3 




MON Hlf Xl 

** 

£ O /> 

:u <\J 

!M CO 

£ 

3 

(V "ft 

—« 

£ If) 

X 

ft) 

X 

ft) 

r-4 

ft £3 — 

CV 

"0 "ft If 

^ —1 

l/l 3 

rH. 

H 

X £ 

*. 

ft) 

® 

£ 

£ 

X 






•H 

| 


•v 

^J <V ' 

/) 

<V 


c 


• 





» 








•H 


Uj 









J 






O J 



1 

yi 



UJ 








o ►-« 

UJ 

o 


uJ 1/1 



)- 



z 


ft- 



ft- _) 

x * 
*- o 
yi — 

o a 
o o 
z < 


tri- S 2 3 

a. x o«- i/i o 
it u.' »- r w uj 

Z f j w « \/l _J 

o u _i z "» ox 

** j - a i j • -< x 

i 

uo ft- u. o _i x w a 
xj t uj < ia<w>*-» 
o x a. o u a t o z z 
Z ft- "<-<LJft-"«*-»Xl/) 
-pv/iOH-aazxzo i 
ZZOKOlHUUhX 
~ O O uJ «* 3xZ.«0"- 
X O u. U. -J 0. UX x« 


a uj 

u- 

>- Z 2 
UiOO 

« z - 
u. u *- 

X 

< 


z 
« * 
X I 

1/1 

u z 

1/1 < 

"" X 

X — 


< /• 

U It) 


1/1 

UJ 


z *- z 

3 ►* U)*' 
X _l C I 

i - < r 

O )- X "ft 
O ' O ft- U. 


> l/l' 

S Ul 
O' 

X 

l/VZ O 

U) < It 

u — 

►-< -I o' 

> "ft uJ ft- 

X > X o 

UJ — X ►- 

l/l Oft 


Uj 

X 

V 

o 

s' 

z 

UJ 

-I 

< 


z 

UJ 

X 

V, 

o 

_* 

Z X 


I 


I 


o 

a 

o 

a 


ft 

> 

— 

o' 


UJ 

u 

x 

o 

u. 

X 

o 

n 

< 

_) 


>1 

-ft 

o 


CV 

ft 

ft 


in 


a 

tv 


tV 


280 


UNEMPLOYMENT RATE 4.1 2.B 



















tHYOVINr- table 15 (continued) 


ACDA/E-156 


1 



cv a a x h 

r Ae 

tt r. cc ■. r. r* c!r 

^ G 

X A 

X. 

Cl 


» 

1 

** 

4T 


• » • 

• 

• • • 

g • • . . . ^ ■ • 

•> • 

• • 

• 

• 

• 



x a 

1. 


«v 

«- <v 

r. 

a cv cv 

If A A A 

«\ a 

<r 

e 



A 

i v 



t 



1 - 1 

1 



A 

1 



•: 

«C 

r. 



1 



1 





i 

f 

1/ c 


c 

<c,r 

X 

AOt«ta-A«CAr 

< - 

a a 

c! 


c 

r^l 

b 


C 


• • • 

• 

• • • 


• e 

• • 

*4 

• 

• 

m 

«-• u « 

' Z C 1 

a n 


A 

tv^iv 

a 

m <v» r 

ifi fl ff f 

•»1 -I 

1 

i 

<V IT 

a 

r, 

1 

i 

1 


71 

1 Q 

K ~ 










t 

u z 

! 4- a • 



a *- r. 

»r 

a o — 

C 3 AC ifclf All-. 

»*■ ^ 

— <\ 

c 

r 

0 

iri 

> it 



• 

• • • 

• 

• mm 


» • 

• • 

i 

• 

» 

* 

► 

a r 


1 

X 1 


1 ^ C 

C «^C <M\C 


— 1 

^ 

r 

I 


c 

a i 



i « 

i 

i i 

1 1 1 A | | | 1 

1 1 

t 

a 

i 


r 


Q. 






1 

1 



• 

w 













IT 


ev 

C 

c c c 

c 

c o c 

G.-CCCC.CC 

c c 

^ c 


c 

C 

c 

4 

a 



1 



• 1 1 



1 



i 

a 

* 













z 

«T' 













a 













i 

e 














a 














a 

• 


C 

c c c 

c 

c c c 

c—c — cccc 

— c 

r- C 


c 

c 

c 

a 

« 

•- 


» 



1 1 1 



1 

• 


1 


1 











c 

c\ 




















• 1 







a 














c 


c 

c 

^ c c 

c 

c c c 

c^c^cccc 

c c 

e c 

«■> 

ir 

K 

a. 


^ 


1 

t 1 1 

1 

1 1 1 

1 1 i 1 1 1 1 1 

1 1 

i t 

• 

• 

i 


a 

1 











, 
















a 


e 

r. c c 

c 

c c c 

c, c c c c c c,c 

o 

— C 

c 


r. 

c\ 

w 

2 a 
c •- 
«- c 
a 

_i 

0 

1 

l 1 i 

1 

1 1 1 

• • 1 t 1 1 1.1 

t • 

». i 


. i 

i 

• 















a 


a 


ir 

« 

l 


f-> s. 

i4 a 

X * * 

5 »C 

* 

x a 
e a 

— c 

X <_ 


f'-.a)<\joc..-«<va<\.e»r;fC m<\j a <v c ki 

•- «— (V (V K - 


tv ^ 


a cc 

a r- 

^ & 


r^tvo^cvco^tMcnjcfo^otvjcwtviri^oir e~ — 


4 c. 

a. 


O 


1 


Cg 

X 


a 

a 

2- — 

c c 


oooooooooeoeoecoooooo o ** o c 
l I 


U _J 

13 5 a 
o * 
2iC 
g • o 

x 

x 

X 

O X 

a 1 c 

x o 
z 
> 


m 


— cr wccncjcaoic a & x. mc>o cr a o eg 


eg <uki a 

— r 


eg egm a a 


m 


^--.crrgoo — egorvom a O' <v cv c\ if <\i c in n «c o eg 


in 


a 
a 
z ►* 

c c 


•n 


GGOOOOOOOOOOOOOOOOOOO —< —I *-1 o 


o 


00 — 

►-* 

H T X 

W J 

a o 

• u 

o 
n 
<* 

x 

* ? 
o o 

U u 

z 


—o f\ 1 c-o.»c\.c-.c» r a c <\. a. <\ if r.c n a a. o eg 
-t -\j -\jm a e- n 

« io «-« 


r- 


J>'\lGO-4'U:3«HGI*la3''U''g«"*.n cuo <\j 

_ eg CJ in 


eg 

a 


x 

a 

>n 


o 

~ iT 


at- 

3 


V _J 

X X 
*- o 

1/5 — 

3 X 
3 O 


a 

O -J 

o *-• a 

a »- x 

a x 3 

1/ a) »- 

7»- Jh" 

C\U _l Z 
-4 ~ « O X 

C X a = 

u o *- a 

D r a «* i 

o x a _» u x 

Z •— - - Ul 

•-• utq i- a i 

Z Z O X 3D X 

O O U < — 

ZOaryi J 


O 

? 

►-« 

X 

1/5 

_) 

■x x >- 

3 ja 
X < u 
• u z 

H- — —• 

Z X X 
MUiU 

a x < 

£ o x 


3 

i/i o 

a u 
a 

U X 
— X 
Z I 
a a 
> -• 

x 5 

O I 
►— X 

o «* 

x < 


1/5 

a «/> 
x a 
3 in iA 
*- O Z 1 

u o o 

«t X •— 

a a *- 

z < u a 

< "* *i« 

I IZi- 
/i r - 
u z x a 
i/l « x — 

h q; o i- 

z>- / 3 


> 

3 


a 

H- 
<1 
H* 

X. 

l/l 

a 

ul 

X X 

I l/l z o 
i/i a < a 
Z u « 
a -* *-• j o> 
3 i > - a 

< Z X > X 

x •* a« a 

i> a Jlo <i 


Z 

a 

x 


a 

x 

a 


< 

*~ 

o 


i 

% 

a 


a, 

x. 

>■ 


\ 


> 

•* 

u 


u 

X 

o 

a 

x 

o 

t£ 

« 

a 

> 


281 


UNfcMPLOYMFrtT RATE o.b 6.? 6.2 6,2 4.0. 6,4 















ACDA/E-156 


MILITARY EXPENDITURES AND THE ECONOMIC GROWTH OF THE NORTHEAST CORRIDOR 


by 

Robert Thomas Crow 


V.l INTRODUCTION 

Any kind of activity undertaken or abandoned by the Federal 
government will have not only a nation-wide impact but, in addition, 
will probably have a differential impact among the regions of the United 
States. This is most clear for activities which by their very nature 
are specific to a location, such as a dam on a particular river or a 
highway connecting a particular pair of cities. It is also true, how¬ 
ever, for general levels of defense activity in that military bases 
and firms relying on military procurement are not distributed uniformly 
across the United States. In view of this, an understanding of how 
military expenditure alternatives are apt to affect regional economic 
growth is important for economic policy. As a step toward such an 
understanding, three military spending alternatives have been investi¬ 
gated for their impact upon the three sub-regions of the Northeast 
Corridor. The results of this investigation are presented in this 
paper. 


The Northeast Corridor, as the term is used here, consists of 
New Hampshire, Massachusetts, Rhode Island and Connecticut (the 
Northern sub-region); New York, New Jersey and Pennsylvania (the 
Central sub-region); and Delaware, Maryland, the District of Columbia 
and Virginia (the Southern sub-region). The model of growth used to 
simulate the effects of alternative military spending policies is a 
macroeconomic model of each of these three regions.' 1 ' The basic out¬ 
puts of the model are gross regional product by industry of origin, 
by type of expenditure, and by distributive shares. Other outputs are 
employment, wage rates and population. 

The model consists of forty-three statistically estimated equa¬ 
tions and eleven identities, estimated from annual data over the time 


The model is described in detail in Robert Thomas Crow, An 
Econometric Model of the Northeast Corridor of the United States , 

Springfield, Va., U.S. Clearinghouse for Federal Scientific and Tech¬ 
nical Information, 1969. Its geographic dimensions appear in Map 1. 

282 


f 




ACDA/E-156 


MAP 1 


Northeast Corridor States and Subregions 



Hampshire 


New York 


\ d^Rhode 

Island 

Connecticut 


Pennsylvania 


aryland 


District^ 

of Columbia 


u T H E R N 


Virginia 


283 


ACDA/E-156 


period 1949-1963. The sample consisted of the fifteen time-series 
observations pooled over the three regions, resulting in forty-five 
observations for most equations. 

This model was made fully compatible with the Wharton Econo¬ 
metric Forecasting Model, which was used to simulate the national impact 
of alternative defense expenditure policies.^ It was necessary to re- 
estimate several of the equations and to convert some of the Wharton 
model's quarterly output to annual figures in order to be consistent 
with the annual basis of the Corridor model. In particular, the 
Corridor model used as exogenous variables the Wharton model 1 s fore¬ 
casts of Federal civilian and military expenditures, the farm price 
index, the consumer price index, private GNP, the private wage bill, 

GNP, the GNP price-level deflator, and short-run and long-run interest 
rates. For several of these, relationships were estimated to link 
regional to national variables. Most important for this study, re¬ 
lationships between regional and national military spending were 
estimated for each region, as were relationships for Federal civilian 
spending. These relationships were estimated by taking each type of 
Federal purchase of goods and services in each region as a function 
of the corresponding national variable and a trend variable. 

V.2 A NOTE OF CAUTION 

» 

All of the caveats of the Klein-Mori report on the results of the 
Wharton model also hold true for the Northeast Corridor model, since 
the results of the Klein-Mori simulations provide its inputs. In 
addition, several areas of weakness in the Northeast Corridor model 
should be pointed out. First, it was not possible to collect recent 
data for use in re-estimation of the model. This is also true for 
the projections of Federal expenditures in the Corridor and projections 
of taxes paid on personal income, two critical exogenous variables. 
Parameter estimation was based upon 1949-1963 data. The simulation 
solution used 1969 data for the exogenous variables and, depending upon 
the lag structure, data drawn from 1966-1968 for endogenous variables. 
More recent data used in parameter estimation would have increased 
one’s confidence in the results. 

Second, there can be no doubt that regional econometric model¬ 
building is a much less developed art than is the case for national 


2 

Lawrence R. Klein and Kei Mori, "The Impact of Disarmament on 
Aggregate Economic Activity — An Econometric Analysis," elsewhere in 
this study. 


284 


1 



ACDA/E-156 


models. Inferior data quality, as well as conceptual development, 
account for this. In particular, the relationships between employ¬ 
ment and the labor force in the Northeast Corridor model need improve¬ 
ment, as does the treatment of migration. 

In spite of these warnings, the model appears to perform well 
enough to provide a fairly firm indication of the results of alternative 
military policies for the Northeast Corridor regions in the next few 
years: the regions will not grow as fast as the national economy with 

any of the options; growth will be rapid but also erratic if military 
spending continues at present rates or increases; reduced military 
spending with fiscal and monetary offsets will tend to make growth 
slower but steadier. 

In the discussion that follows, there will be first a summary of 
three alternative sets of assumptions on military spending in the post- 
Vietnam period. Second, the results of the three alternatives will be 
discussed for each of the three regions. Finally, a summary discussion 
is presented. 


V. 3 MILITARY SPENDING ALTERNATIVES 

For each of the three Northeast Corridor regions, solutions were 
estimated corresponding to the "Control," "Budget B ($59.4)," and 
"Budget E ($93.6)," solutions presented by Klein and Mori. At the 
time that the Corridor study was begun, the basic working assumption 
was that the Vietnam war would be ending by early 1970 for all 
alternatives other than those of the Klein-Mori "Extended Control" 
solution, which assumed that the war would continue indefinitely but 
at a slackened pace. At present, it seems unlikely that the war will 
end for several months. Thus, to the extent that our assumptions were 
overly optimistic, the solutions are already outdated. 

Nonetheless, they should provide accurate indicators of the gen¬ 
eral directions of change in the national and regional economies even 
if the timing of the changes, and therefore the accuracy of the fore¬ 
casts, is incorrect. 

V.3.1 The Control Solution 


The control solutions serve as a backdrop against which alter¬ 
native military spending policies can be compared on the national and 


3 


All budgets are in billions of 1972 dollars. 


285 





ACDA/E-156 


regional levels. Briefly stated, the control solutions assume a con¬ 
tinuation of present trends and policies. These include a gradual 
reduction in defense expenditures, a reduction and then dropping of 
the income tax surcharge, and a continued tight money policy. These 
assumptions produce a slowdown for the national economy in 1969 and 
1970, with a recovery in late 1970. 


V.3.2 The Budget B ($59.4) Solution 

Having established the ’'control'* solutions as standards for com¬ 
parison, it is possible to examine the implications of what would 
appear to be the extremes of military expenditure policies feasible 
in the 1969-1972 period. The first of these may be regarded as a 
"peace" policy. In this case, the regional solutions are derived 
from the national Budget B ($59.4) solution reported by Klein and 
Mori. 


The national solution assumes a deferral of expenditures on major 
new weaponry, other equipment cutbacks and the demobilization of one 
million men from current levels. In current dollars, the national 
military budget cuts are $20 billion below the present level. It also 
assumes an easier monetary policy, $10 billion in civilian expenditure 
offsets and a dropping of the personal income tax surcharge on January 
1, 1970,^ followed by an additional five percent cut six months later. 

V.3.3 The Budget E ($93.6) Solution 

At the opposite extreme from the Budget B ($59.4) solution 
is the Budget E ($93.6) solution. This assumes the end of U. S. 
military involvement in Vietnam, an increase in military expenditures, 
and the same level of Federal civilian purchases of goods and services 
as for the Control solution. The assumption for this solution is that 
the ABM and other new military hardware systems are initiated and that 
military personnel levels remain at about 3.5 million men. Accompany¬ 
ing this increased level of military purchases of goods and services is 
an assumed continuation of tight money and an extension of the five 
percent income tax surcharge from the beginning of 1970 through the end 
of 1972. 


Editor's note: As previously noted, time and resource limita¬ 
tions prevented an updating of this study which draws on an early draft 
of the Klein-Mori chapter. 


286 






ACDA/E-156 


V. 4 THE NORTHERN REGION 


V.4.1 The Control Solution 


The results of the Control solution for the Northern region are 
presented in Table 1. Historically, the Northern region's share of 
total Federal purchases of goods and services, for both military and 
civilian purposes, has been declining. This is reflected in the 
control solution by a steady, small decline in military purchases, and 
a much larger decline in civilian purchases. (See Figure 1.) Since 
these are expressed in current dollars, the declines in constant 
dollars are substantial and somewhat more rapid than in the national 
Control solution. This decline in the influence of the Federal govern¬ 
ment in the Northern region is directly reflected in the relatively 
sluggish pace of economic growth predicted t:o occur between 1969 and 
1972. 


In each of the years, employment and economic activity in con¬ 
stant dollars increases. In 1970 economic growth is quite modest but 
nonetheless positive. A sharp recovery is predicted for 1971, almost 
reaching the national rate. Growth in 1972, however, is considerably 
slower, while the growth rate of the national economy increases. 

V.4.2 The Budget B ($59.4) Solution 

Table 2 presents the results of the Budget B ($59.4) solution. 

In this case, military purchases in current dollars fall drastically, 
and, while civilian purchases rise somewhat in current dollars, they 
show a decline in real terms. Economic growth is slower, but more 
regular than in the Control solution. The slowdown in the pace of 
growth between 1969 and 1970 is much less pronounced. As in the Con¬ 
trol solution, the pace of growth is slower than that of the national 
economy, except for 1970 when the rate of growth of real gross product 
is the same as for the economy as a whole. Unlike the Control solution, 
however, the pace does not slacken in 1972. The Budget B ($59.4) 
solution in both the national and Northern Corridor economies produces 
slower rates of growth in 1971 and 1972; but, compared to the Control 
solution, the national-Northern Corridor discrepancies in real growth 
are much greater, with the Northern Corridor lagging further behind the 

nation as a whole. 

V.4.3 The Budget E ($93.6) Solution 

The results of this policy are shown in Table 3. Current dollar 


237 








Control Solution - Northern Region 


ACDA/E-156 



CM 


NO 

rH 

O'. 

o 

in 




n- 

04 

ON 

o 

On 

o 

o 

NO 

CO 


ON 

• 

• 

• 

• 

• 

• 

• 

• 


r —1 

co 

o 

o 


o 

m 

CO 

<r 





<r 

uo 

<r 






<j> 









rH 

00 

m 

CO 

o 

uo 

CO 

SN° 


CU 

r- 

04 

o 

NO 

m 

CM 

ON 

CM 



cr\ 

• 

• 

• 

• 

• 

• 

• 

• 

cd 

r—! 

CO 

rH 

co 

04 

co 

<r 



o 




CO 

uo 

co 






</> 








T3 










d 




















<U 






* 




CO 






4 





o 

CM 

CO 

00 

NO 

n 

uo 



C 

r-» 

CO 

rH 

o 

CO 

o 


r» 

CO 

0) 

ON 

• 

• 

• 

• 

• 

• 

• 

• 

,d 

rH 

CO 

rH 


ON 

n 


O 

rH 

H 




CO 

<r 

CO 




o 


</> 








a> 




















a) 










.d 




















±_> 

ON 


ON 


co 

CM 

NO 

S'S 


Cu 

vO 

CO 

rH 

00 

04 

UO 

NO 

ON 

r- 

CD 

ON 

• 

• 

• 

• 

9 

• 

• 

• 

o 

iH 

CO 

rH 

VO 

O'. 

CO 


rH 

CM 





CO 


CO 




0) 


•co- 









d 








u 


Cd 








cd 


rH 


to 






<0 


rH 


<u 






>* 


o 


a 








T) 


•H 






u 




> 






cd 


H 


if 

CO 





-d 


d 


a) 

T3 





d 


a) 


co 

O 





QJ 


u 



O 




CO 

rH 


u 



o 

✓-S 



u 

cd 

/-N 

d 


d 


00 



<u 

o 

00 

o 


cd 

4H 

UO 



^5 


UO 




O 

ON 



M 

M 

O'. 

NH 


CO 


rH 



o 

o 

rH 

o 


! ’d 

to 



CD 

£ 





o 

0} 

</> 


0 




to 


o 

to 

N/ 


o 

4M 

Pm 

V-/ 

0 


o 

cd 



o 

o 



O 



d 

H 

•u 

d 


0 

H 

•H 


4M 

o 

o 

o 

M 

CO 

o 

a 

rH 


o 


d 

d 


d 

*M 

d 

rH 



d 

"d 

d 

rH 

o 

4H 

T3 

•H 


to 

Pm 

o 

o 

cd 

*H 


o 



Q) 



u 

d 

rH 

<u 

Vm 



(0 

d 

Pm 

Pm 

o 

rH 

00 

Pm 



cd 

cd to 



to 

•H 

d| 




•d 

*H <D 

rH 

rH 

d 

0 

cd 

1—1 



a 

rH CJ 

cd 

td 

CD 

N—' 

a 

cd 



u 

*H *H 

d 

d 

Pm 


CJ 

d 



d 

> > 

o 

o 




o 



PH 

♦H M 

•H 

•H 

<d 

4-i 

<u 

•rH 




CJ CD 

00 

00 

rH 

d 

00 

00 



>> 

CO 

CD 

0) 

d 

<D 

cd 

a) 




rH 

p^ 

pc; 

cd 


H 

P4 


CO 

cd 

td T3 



CO 

!>> 

d 



rH 

u 

m d 

CO 

to 

o 

o 

a) 

CO 


<u 

•H 

<D cd 

CO 

to 

Ou 

rH 

a 

CO 


> 

rH 

T3 

o 

0 

CO 

C4 

V4 

o 


(D 

•H 

0) 

u 

*M 

•H 

0 

a> 

u 


H-l 

s 

Ch 

e> 

e> 

Q 

w 

Pm 

o 


288 


Gross National Product ($ 1958) 










ACDA/E-156 


FIGURE 1 

The Northern Region’s Shares of Total Federal Purchases 
of Goods and Services, 1968 - 1972 



289 







ACDA/E-156 




CM 

NO 

r^* 

ON 



r-. 


CM 

m 



on 

• 

• 

• 



rH 

CM 

rH 

ON 






CO 




-co¬ 










X) 

rH 

rn 

r-» 

c-. 


CU 


00 

CM 



U 

on 

« 

• 

• 


G 

rH 

CM 

rH 

00 


o 




CO 


•H 


<o- 




XJ 






G 






*H 






G 






O <u 
•H 0) 






00 -H 

G £ 

o 

<r 

CM 



Ctf U 


CM 

CM 

m 


CU 

ON 

• 

« 

• 


6 .C 

rH 

CO 

rH 

r-. 


M -U 




CO 


G o 

42 

4-J Q) 

u U 

O 0) 

53 ■§ 
i 

4-> 


<J> 




ON 


ON 


CM 

c a* 

NO 

CO 

*H 

00 


o <u 

ON 

• 

• 

• 

w 

■H CJ 

rH 

CO 

rH 

NO 

rJ 

t; x 




CO 

PQ 

3 <U 


■CO¬ 



< 

rH 





H 

o * 

co cn 






M 






^ CO 
rH1 


CO 




• rH 


a) 




on o 


CJ 




t-O *x) 

</> 


*H 

£ 

CO 



G 


0) 

X) 



PQ Q) 


CO 

O 



H 



O 



4J H 


X> 

O 



0) 3 


G 


00 


00 CJ 


G 

CW 

in 


X3 



O 

ON 


3 <H 


(0 


rH 


P3 o 


XJ 

CO 





O 

G 

</> 


CO 


o 

CO 

N»^ 


G 


o 

CO 



O 



42 

U 


•H 


MH 

a 

a 


rH 


o 

M 

3 


H 



3 

X) 


H 


CO 

PH 

o 


X* 


CU 


u 




CO 

G 

PH 




G 

CO CO 





42 

•H G 

rH 




o 

rH U 

G 




G 

•H *H 

G 




3 

> > 

O 




Oh 

•H w 

-H 





cj a) 

00 




Pn 

CO 

CU 




u 

rH 

ctf 



CO 

G 

CO XJ 




rH 

•U 

U G 

CO 



a) 

•H 

0) G 

CO 



> 

rH 

XJ 

o 



a) 

*H 

G 

u 



-i 

X! 

Ch 

o 


r*» 

o 

ON 

3-5 


CM 

00 

ON 

ON 

CO 

• 

• 

« 

• 

• 

m 

ON 

CO 


CM 



00 

NO 

rH 



CM 

CM 

ON 

m 

CO 

• 

• 

• 

• 

• 

CM 

in 

00 

CO 


CM 

CO 


rH 

rH 

o 

6-5 

O 

m 

00 

oo 

• 

* 

• 

• 

o 

NO 


rH 

m 

CO 




CO 

VO 

NO 

6-5 

CM 

m 

NO 

O 

• 

• 

• 

• 

r-. 

CO 


CM 

<r 

CO 







M 





G 





G 





>* 





U 





G 





XJ 





G 





G 





rH 




CO 

G 




u 

CJ 

00 



G 


m 



44 

U 

ON 



M 

o 

rH 


0) 

o 

•H 



0 

> 


</> 


o 


PH 

'—' 


o 

4H 



•U 

G 

O 

0 

■U 

a 

(H 


O 

a 

3 


CO 

M 

3 

XJ 

rH 

G 

U-f 

XJ 

o 

G 

O 


o 

u 

G 

•H 

G 

u 

ph 

O 

rH 

OC 

PH 


CO 

rH 

G 


rH 

M 

•H 

G 

rH 

G 

G 

0 

42 

G 

G 

PH 

-w- 

CJ 

G 

O 




O 

iH 

CD 

u 

G 

•H 

00 

rH 

G 

00 

00 

<U 

40 

G 

G 

G 


G 

0 

H 



CO 

!>> 

G 


CO 

O 

O 

G 

CO 

CO 

a 

rH 

O 

CO 

o 

CO 

ex 

M 

O 

u 

*H 

0 

G 

H 

o 

Q 

w 

PH 

a 


290 


Gross National Product ($ 1958) 2.6 1,8 









Budget E ($93.6) Solution - Northern Region 
(billions of current dollars, except where otherwise indicated) 


ACDA/E-156 


CM 


vO 

<* 

00 

vO 

O 

I - ". 

00 

ON 

CO 

m 

r>. 

rH 

ON 

• 

• 

• 

• 

• 

• 

•H 

co 

O 

o 


ON 

m 




<1- 

m 

CO 



</> 








r—1 


m 

n* 

f"-. 

rH 

m 




vO 

o 


r->. 

O 

ON 

rH 

v£> 

ON 

• 

• 

• 

• 

• 

• 

• 

9 

rH 

CO 

rH 

00 

CM 

00 







CO 

m 

CO 





•CO- 









o 

n* 

co 

m 

CM 

vO 





S3- 

rH 

CM 

VO 

m 


rH 

vO 

ON 

• 

• 

• 

• 

• 

• 

• 

• 

rH 

CO 

rH 

n- 

ON 

m 


rH 

rH 




CO 


CO 





<j> 


ON 

ST 

ON 

m 

-4- 

vO 

vO 



VO 

CO 

rH 

00 

CM 

m 

VO 

o 

vO 

ON 

• 

• 

• 

• 

• 

• 

• 

• 

rH 

CO 

rH 

vO 

n. 

CO 


CM 

CM 




CO 

sf 

CO 





</> 
















M 









cd 



03 






d) 



0) 

XJ 








O 

a 








•H 

«d 





u 



> 






cd 



U 

CO 





x> 



Q) 

X) 





d 



CO 

o 





<u 




o 





rH 



XJ 

o 

/-s 



CO 

cd 



d 

00 



M 

o 

00 


cd 

4-1 

m 



a) 


m 



o 

ON 




M 

ON 


CO 


rH 




O 

rH 


X> 

CO 



0) 

O 

•H 



o 

<D 

<jy 


a 


M 

</> 


o 

CO 



o 


PH 



o 

<d 



o 

4H 

a 



.d 

■U 

4J 

d 

O 

4-» 


4-i 

o 

o 

O 

M 


o 

O 


O 

M 

d 

d 


CO 

M 

d 



d 

x> 

XJ 

rH 

d 

4H 

XJ 


CO 

PH 

o 

o 

cd 

o 


o 


0) 


M 

u 

d 

-H 

<U 

M 


CO 

d 

PH 

P-» 

o 

rH 

oc 

PH 


cd 

«d 



CO 

rH 

d 



XI 

•H 

rH 

rH 

M 

iH 

cd 

rH 


o 

rH 

cd 

«d 

(1) 

a 

-d 

cd 


u 

•H 

d 

d 

PH 

w 

u 

d 


d 

> CO 

o 

o 




o 



•H <D 

♦H 

•H 

<U 

4-> 

<u 

•rH 


O O 

00 

00 

rH 

d 

oc 

00 


>> 

•H 

a) 

a) 


a) 

cd 

0) 


u 

rH > 

C*S 

o4 

cd 

a 

■U 

Ctf 

CO 

cd 

cd U 



CO 


d 


rH 

u 

u <u 

to 

to 

o 

o 

Q) 

CO 

0) 

*H 

0) CO 

CO 

CO 

a 

rH 

u 

CO 

> 

rH 

x> 

o 

o 

to 

a 

M 

o 

(1) 

•H 

<u 

M 

M 

*H 

a 

a) 

Hi 

hJ 


pH 

o 

O 

o 

w 

PH 

a 


291 


Gross National Product ($ 1958) 





ACDA/E-156 


military purchases of goods and services rise by over one-half billion 
dollars, while civilian purchases continue downward. The Northern 
region tracks the national economy fairly closely, but at lower rates 
of growth for 1969, 1970 and 1971. In 1972, however, the national 
economy’s growth is predicted to increase its rate, while the Northern 
region's is predicted to slacken somewhat. 

V.4.4 Comparison of the Solutions 

The Budget E ($93.6) solution yields higher rates of growth than 
the Control solution for 1969, 1970 and 1972. It is a considerably 
more stable path, varying in its real growth from 1.1 percent to 4.1 
percent, while the Control solution varies from 0.7 percent to 4.2 per¬ 
cent. Compared to the Budget B ($59.4) solution, the Budget E ($93.6) 
solution's growth rates are genrally higher,, but less stable. The 
Budget B ($59.4) solution's growth rates are the same or higher in 
1969 and 1970 and significantly lower in 1971 and 1972 than the 
Budget E ($93.6) solution's, but they only vary between 1.8 and 2.9 
percent. 

As would be expected, the Budget E ($93.6) solution generally 
yields the highest growth rates, followed by the Control solution and 
the Budget B ($59.4) solution. The Budget B ($59.4) solution yields 
the steadiest growth, however, followed by the Budget E ($93.6) and 
the Control solutions. It is important to note that none of the 
solutions produce a negative rate of growth for any of the years con¬ 
sidered and that the lowest rate of growth for any one year is 
generated by the Control solution, not the "peace" solution. 

V.5 THE CENTRAL REGION 


V.5.1 The Control Solution 

Results of the Control solution for the Central region are pre¬ 
sented in Table 4. The Central region's shares of both Federal military 
and civilian purchases of goods and services are projected to fall. (See 
Figure 2.) This fall is sufficiently rapid to lead to a current and 
constant dollar decline in both types of Federal expenditures. Relative 
to the Northern region, the percentage decline is greater for military 
purchases of goods and services and less for civilian purchases. 

Growth in employment and other variables occurs throughout the 
period but consistently lags behind the rate of growth of the economy 


292 




ACDA/E-156 


sr 

w 

xn 


H 


( 1 ) 

rH M 

cd a; 
U JC, 
4J £ 


CM 

st 

v£> 

m 

vO 

ON 00 

in **■ rH 



rs 

o 

m 

00 

rs 

sf 

00 

On 

• 

• 

• 

• 

• • 

• 

• 

rH 

o 

<t 

St 

CM 

St ON 

cn 

st 


rH 


m 

rH 

**t rH * «... 


i 



- 

rH 

CM 

rH 



</> 

I' 

•' V 


• / l:., ' . r t . 




no 

rH 

m 

00 

St 

o 

vO 

ON 

^5 


Q) 

rs 

CM 

rs 

rs 

m 

CM 

vO 

O 

St 

U 

ON 

• 

• 

• 

• 

• 

• 

• 

• 

cd 

rH 

o 

st 

ON 

co 

ON 

00 

St 

St 

o 


rH 


St 

o 

CO 

rH 



*H 




rH 

CM 

rH 






-co¬ 








a 










•H 










CD 










0) 










*H 

O 

st 

00 

CM 

in 

O 

vO 



e is 

rs 

St 

ON 

ON 

m 

CO 

On 

ON 

CO 

O 0) 

ON 

• 

• 

• 

• 

• 

• 

• 

• 

•H jC 

rH 

O 

St 

CO 

rH 

00 

rs x 

o 

rH 

00 -U 


rH 


St 

ON. 

CM 

rH 



0) o 

Cd 


-CO- 


rH 

rH 

rH 

> 






<D 4J 

ON 

rs 

rH 

00 

CM 

00 

st 


6^ 

O (X 

vO 

m 

rH 

vO 

ON 

cn 

in 


st 

<D 

O' 

» 

» *■ 

• 

• 

• 

• 

• 


• 

i O 

rH 

o 

m 

CM 

CM 

rH 

rs 


rH 



rH 


St 

00 

CM 

rH 



d a) 




rH 

rH 

rH 




o 


<jy 








•H •» 


1 








4J CO 










2 M 








Pi 


rH Cd 








cd 


O rH 


03 






(D 


CO rH 


CD 

no 





>-• 


o 


a 

a 







rH XJ 


•H 

cd 





U 


o 


> 






cd 


M 4J 


U 

03 





nO 


u c 


<D 

no 





d 


d 0) 


CO 

o 





<D 


O 5S 



o 




/~v 

rH 


CJ Pi 


TJ 

o 

/—s 



03 

Cd 


d 


a 


00 



U 

O 

00 

a 


cd 

4H 

in 



CD 


m 




o 

ON 




Pi 

ON 

4-1 


03 


rH 



U 

o 

rH 

o 


n0 

03 



CD 

o 

♦H 




a 

d) 

</> 


a 

£ 


</> 

CO 


o 

03 

'—✓ 


o 




a 


o 

cd 



a 

4H 



CD 



rC . 


H 

a 

0 

0 

H 

*rl 


4H 

a 

U 

• a 

M- 

...» r , -,.v *VJ-. 

O 

r O 

rH 


o 

M 

0 

...d - • 

... »>■ 

03 

u 

d 

rH 



d - 

tT 

nO 

rH 

d 

4H 

no 

•H 


oi 

P* 

o 

O 

cd 

o 


o 

X 


<D 


M 

U 

a 

•H 

CD 


V—' 


03 

d 

P-. 

PH 

o 

«H 

OC 

P^ 



cd 

cd 



03 

rH 

d 




X 

•H 

rH 

rH 

U 

•H 

cd 

rH 



o 

»H 

cd 

cd 

a) 

a 

X 

cd 



u 

•H 

d 

a 

P-4 

v-» 

o 

d 



d 

> 03 

o 

o 




o 



0-» 

•H <D 

•H 

•H 

(D 

4J 

CD 

•H 




O O 

oo 

00 

rH 

d 

oc 

00 



Jn 

•H 

a> 

CD 

X* 

<D 

cd 

<D 



M 

rH > 

pd 

Pd 

cd 

i 

u 

Pd 


CO 

cd 

<d M 



03 


d 



rH 

4J 

Pi 0) 

03. - 

03 

O 

o 

* «. Q) 

03 


<y 

•H 

CD CO 

03 

03 

cu 

rH 

o 

03 


> 

rH 

no 

O 

o 

03 

(X 

H 

O 


CD 

•H 

0) 

n ,.V» 

M 

•rl 

- a 

0) 

Pi 


►J 

X 

PH 

e> 

O 

Q 

w 

PH 

O 


r^. 

CM 


293 


Gross National Product ($ 1958) 








ACDA/E-156 


FIGURE 2 

The Central Region 9 8 Shares of Total Federal Purchases 
of Goods and Services, 1968 - 1972 



294 







ACDA/E-156 


as a whole. It follows the slowdown predicted for the nation in 1970, 
but in 1972 the predicted growth rate declines again, while the national 
growth rate is predicted to increase. 

V.5.2 The Budget B ($59.4) Solution 

Table 5 shows the results of the Budget B ($59.4) solution. 

As expected, military purchases in the region fall sharply, by over 
$3 billion in current dollars. Current dollar increases in civilian 
purchases are almost $1 billion, yielding a slight increase in constant 
dollars. This solution yields steady but slow growth throughout the 
simulation period, with each year’s real growth rate higher than the 
previous year’s. The growth rate never matches that of the national 
economy but comes close for 1970. It is interesting to note that for 
1970 the regional growth rate increases in the face of a declining 
rate for the nation. 

V.5.3 The Budget E ($93.6) Solution 

Table 6 shows the results of the Budget E ($93.6) solution. 

For this solution, both current and constant Federal dollar outlays 
increase for military purposes and decline for civilian uses. An 
interesting characteristic of this solution is that the Central 
region's economy is predicted to be virtually stagnant in 1970, but to 
recover strongly in 1971 and 1972. The growth rate never matches that 
of the national economy, but it comes fairly close in 1971. 

V.5.4 Comparison of the Solutions 

A comparison of the three solutions shows the Central region 
reacting to military expenditures and associated policies in much the 
same way as the Northern region. The Budget E ($93.6) option 
generates slightly higher growth over the period than does the Control 
solution, with the Budget B ($59.4) option the lowest of the three. 

The Results with regard to stability differ from those for the Northern 
region, however, in that the Control solution is predicted to be more 
stable than the Budget E ($93.6) solution. Again, the Budget B 
($59.4) is the most stable of the three, showing a steady increase of 
growth throughout the period, varying only from 1.4 to 2.8 percent, 
while the Control solution varies from 0.9 to 4.0 percent and the 
Budget E ($93.6) option varies from 0.2 to 4.5 percent. 


295 





ACDA/E-156 





CM 

<r 

CO 

00 


ON 








r^ 

CM 

o 

ON 

r-* 


ON 


00 

CO 




ON 

rH 

• 

r*. 

• 

vO 

• 

CM 

• 

ON 

• 

CM 

• 

00 


• 

CM 

• 







uo 

o 

<r 

rH 








</> 


rH 

CM 

rH 




















T3 

rH 

m 

uo 

CM 

uo 

uo 

00 






<u 


vO 

r>» 

00 

CM 

U0 

U0 


U0 

CO 



AJ 

ON 

• 

• 

• 

• 

• 

• 


• 

• 



(0 

rH 

00 

m 

00 

CM 

r- 

00 


CM 

CO 



a 




<r 

O 

CO 

rH 






•H 


co¬ 


rH 

CM 

rH 







73 













d 













•H 












c 

d) 












o 

(0 












‘H 

KA 

iH 

£ 

o 

in 

vO 

CM 

O 

rH 

CM 





ou 

m 

s 


rH 

CO 

rH 

CO 

00 

rH 



00 


w 

ps5 

<U 

X 

ON 

rH 

• 

O 

• 

m 

• 

UO 

• 

CO 

• 

o 

• 

00 


• 

rH 

• 

rH 


—j 

AJ 


rH 



ON 

CO 

rH 





V v 

ctJ 

o 




rH 

rH 

rH 






M 



</> 










AJ 

<0 












d 

u 












0) 

0) 












u 













1 

AJ 

ON 

C-. 

rH 

CO 

U0 

<r 

CO 




in 

d 

a 

vO 

m 

rH 

VD 

00 

00 

U0 


-3- 

VO 


o 

<y 

ON 

• 

• 

• 

• 

• 

• 


• 

• 

Ss3 


o 

rH 

o 

uo 

CM 

CM 

rH 



rH 

CM 

►J 

4J 



rH 


MJ* 

00 

CM 

rH 




eq 

d 

<0 




rH 

rH 

rH 





-2 

H 



co¬ 









H 

o 

•* 












C/5 

to 





















VJ 




/—S 

to 








d 





rH 


rn 






a) 




« 

rH 


a) 

7} 





>* 




On 

O 


o 

q 









m 

73 


H 

d 





M 




</> 



> 






d 





AJ 



CO 





73 





d 


a) 

73 





d 




PQ 

CU 


CO 

o 





d) 





J-4 



o 




/^s 

rH 




i_i 

H 


73 

o 




CO 

d 




QJ 

d 


d 


00 



u 

CJ 

00 

00 


50 

o 


d 

UH 

UO 



Q) 


U0 

uo 


T3 




o 

ON 




u 

ON 

ON 



MH 


CO 


rH 



u 

o 

rH 

rH 


QD 

o 


73 

CO 



d) 

o 

•rH 







o 

a) 

<n- 


a 

£ 

Vj 

<j> 

</> 



CO 


o 

CO 

V—/ 


O 


P-I 





d 


o 

d 



o 

MH 






o 



43 

AJ 

AJ 

d 

O 

a 

AJ 

AJ 



•H 


MH 

o 

CJ 

o 

M 


o 

a 

a 



«H 


O 


d 

d 


CO 

U 

d 

d 



rH 



d 

73 

73 

rH 

d 

4H 

73 

73 



*H 


CO 

CM 

O 

O 

d 

o 


O 

O 



Xi 


0) 


U 

U 

d 

•H 

d) 

u 

M 



v—/ 


CO 

d 

CU 

CU 

o 

rH 

5C 

CU 

CU 





d 

d 



CO 

rH 

d 







43 

•H 

rH 

rH 

}-» 

*H 

d 

rH 

r—1 





o 

rH 

d 

d 

0) 

a 

43 

d 

d 






•H 

d 

d 

CU 


o 

d 

d 





d 

> CO 

o 

o 




o 

o 






•H d> 

•H 


Q) 

AJ 

<u 

•H 

*H 






CJ O 

50 

50 

rH 

d 

5C 

50 

AJ 





>% 

•rH 

0) 

<U 

X> 

a) 

d 

(D 

d 





u 

rH > 

Pd 

cd 

d 

a 

AJ 

cd 





CO 

d 

d M 



CO 


d 






rH 

AJ 

M <U 

CO 

CO 

o 

o 

CU 

CO 

CO 




<D 

•H 

0) CO 

CO 

CO 

a 

rH 

o 

CO 

CO 




> 

rH 

73 

o 

o 

C0 

CU 

H 

o 

o 




0) 

•H 

<U 

M 

M 


a 

0) 


u 




hJ 


Ph 

o 

O 

Q 

w 

Pm 

o 

e> 


296 






Budget E ($93.6) Solution - Central Region 
(billions of current dollars, except where otherwise indicated) 


ACDA/E-156 



oo 


vO 

00 

m 

m 

<r 


6^ 


CM 

CM 


m 

r-~ 

NO 

CO 

CO 


•n 

rH 

r^. 

• 


• 

• 

• 

• 

• 


• 

* 

On 

CM 



m 

<* 

CO 

ON 



in 

rH 

rH 



m 

rH 

<* 

rH 








rH 

CM 

rH 






</> 











CO 


00 

CO 

CO 

»n 

CM 


^2 


tH 

NO 



o 

00 

ON 

NO 


CO 

NO 


• 


• 

• 

♦ 

• 

• 


• 

• 

ON 

rH 



ON 

CM 


00 




tH 

rH 




O 

CO 

rH 








rH 

CM 

rH 






CO- 











CM 


CO 


O 

ON 

m 


^2 


O 

o 


ON 

On 


ON 

On 


CM 

NO 


• 


• 

• 

• 

• 

• 


• 

. 

ON 

rH 



CM 

o 




O 

rH 

<H 

rH 




ON 

CM 

rH 








rH 

rH 

rH 






</> 













rH 

CO 

m 

CO 

CO 


S>2 


ON 

m 


m 

NO 

00 

CM 

in 



NO 

vO 

• 


• 

• 

• 

• 

• 


• 

. 

ON 

o 


m 

CM 

CM 

tH 



rH 

CM 

rH 

rH 



<r 

00 

CM 

rH 








rH 

rH 

rH 






<jy 


















Hi 











cd 




g 







cd 




<D 

13 






>■« 




u 

a 










•H 

g 






Hi 




f> 







cd 




w 

CO 










(D 

T3 






G 




00 

O 






(D 





O 






iH 




TJ 

a 





CO 

cd 




c 






Hi 

o 




G 

<H 


00 



CD 






o 


m 




Hi 




CD 



ON 



Hi 

O 




•o 

CO 


rH 


a> 

O 

•H 




O 

a» 


<J> 


0 

$ 

Hi 




O 

CO 


'w' 


o 


PH 




O 

G 




o 

44 






42 


44 

44 

a 

o 

0 

44 

44 


IH 

O 


O 

O 

M 


O 

o 

O 


o 

Hi 


G 

G 


CO 

Hi 

G 

G 



0 



T) 

rH 

G 

4-i 

T3 

x) 


03 

PH 


O 

O 

cd 

o 


O 

o 


<D 



U 

Hi 

g 

*H 

Cl) 

Hi 

Hi 


CO 

G 


P-t 

PH 

o 

rH 

ot 

PH 

PH 


G 

«d 




CO 

rH 

G 




42 

"H 


rH 

rH 

H 

*H 

cd 

tH 

rH 


o 

rH 


cd 

cd 

0) 

0 

42 

cd 

cd 


H 

*H 


g 

g 

PH 


U 

G 

G 


3 

> 

CO 

o 

o 




O 

o 


PH 


0) 

•H 

•H 

0) 

U 

(D 

•H 




O 

a 

00 

00 

rH 

G 

0C 

00 

44 


Jn 



CD 

a> 

rO 

d) 

G 

<D 

G 


U 

rH 

> 

P*5 

ptf 

cd 

0 

H 

Pd 

25 

g 

G 

cd 

u 



CO 

>N 

G 



rH 

•u 

u 

CD 

CO 

CO 

•o 

o 

(D 

CO 

G 

0) 

•H 

a) 

CO 

CO 

CO 

PH 

1—1 

O 

CO 

G 

> 

rH 

T3 


o 

o 

CO 

PH 

Hi 

o 

O 

Q> 

•H 

a) 


H 

Hi 

' *H 

B 

CD 

Hi 

Hi 

hJ 


pH 


O 

O 

PG 

W 

PH 

O 

O 


297 






ACDA/E-156 


V.6 THE SOUTHERN REGION 


V.6.1 The Control Solution 


Under the assumptions of the Control solution, the shares of 
both civilian and military purchases are projected to remain approxi¬ 
mately constant. (See Figure 3.) 

In this solution, shown in Table 7, current dollar military 
purchases remain approximately the same, implying some decline in 
constant dollars. Civilian government purchases, however, increase 
by about 10 percent in current dollars, implying a slight increase in 
constant dollars. Growth is predicted to be relatively sluggish when 
compared to the national economy, slowing in 1970 to 0.8 percent and 
then picking up in 1971 and 1972, but still falling far below national 
rates. 

V.6.2 The Budget B ($59.4) Solution 

The results of this solution are shown in Table 8. As would be 
expected, military purchases of goods and services fall sharply in both 
current and constant dollars. Civilian purchases increase significantly 
in both current and constant dollars, even though their share is ex¬ 
pected to decline. (See Figure 3.) The predicted growth is slow but 
increasing in both employment and constant dollar gross regional product. 
Each year is predicted to have a more rapid growth rate than the pre¬ 
vious year, but never as rapid a rate as the national economy. As in 
the Central region, a slowdown in 1970 is avoided for the Budget B 
($59.4) solution, and for that year regional growth almost matches 
that of the nation. 

V.6.3 The Budget E ($93.6) Solution 

In Table 9, it may be seen that current dollar expenditures 
increase for both military and civilian expenditures on goods and 
services. Both types of expenditure would also rise slightly in 
constant dollars. The growth of output from this solution is positive 
throughout the period, following the national economy in a slump in 
1970 and recovering strongly in 1971 and 1972, but not nearly as 
strongly as the national economy. 

V.6.4 Comparison of the Solutions 

The Budget E ($93.6) alternative and the Control alternative 


298 






ACDA/E-156 


FIGURE 3 

The Southern Region’s Share of Total Federal Purchases 
of Goods and Services, 1968 - 1972 


5.0% 


4.0% 


3.0% 



Military 


Budget E 
Budget B 


Control 


1968 


1969 


1970 


1971 


1972 


299 











Control Solution - Southern Region 
(billions of current dollars, except where otherwise indicated) 


ACDA/E-156 



co 

H 

in 

o 

00 




CM 

o 

st 

ON 

ON 

co 

<1- 


rH 

fs. 

• 

. 

. 

• 

• 

• 


• 

ON 

CO 

st 

rH 

CO 

o 

<r 


CO 

rH 



CO 

St 

CO 





•co¬ 









in 

00 

O 

co 

m 

<r 




o 

CM 

O 

rH 

<r 

CO 


o 

h. 

• 

• 

. 

• 

• 

• 


• 

ON 

co 


rH 

CM 

ON 



CO 

rH 



CO 

Sf 

CM 





</> 









v£> 

vO 

ON 

vO 

vO 

CM 


eM 

o 

O 


O 

O 

r^. 

CM 


00 

r- 

• 

• 

• 

• 

• 

• 


• 

ON 

CO 

<r 

o 

O 


st 


o 

rH 



CO 

<r 

CM 





</> 










o 

vO 

o 

O 

CM 



On 

O 

o 

CO 

CM 

CM 

rH 


o 

vO 

• 

• 

• 

• 

• 

• 


• 

ON 

co 

<r 

ON 

00 

VO 

St 


rH 

rH 



CM 

co 

CM 





co¬ 















U 









cd 



co 






d> 



d> 

T3 








o 

C 








•H 

cd 





u 



> 






cd 



H 

co 





TJ 



0) 






CJ 



CO 

o 





d) 




o 




/—N 

rH 




o 




CO 

cd 



cj 


/—s 



u 

u 



cd 

4-1 

00 



d> 


00 



O 

m 



fa 

M 

m 


co 


ON 



u 

O 

ON 


•o 

CO 



a> 

o 

•rl 

rH 


o 

d) 

CO- 


0 

& 

U 

</> 


o 

co 

'—✓ 


o 


fa 



o 

cd 



a 

4-1 





fa 

4-1 

■U 

a 

o 

0 

4-1 


•4-) 

o 

a 

O 

M 


O 

O 


o 

M 

G 

G 


CO 

u 

G 



O 


TJ 

rH 

cj 

4-1 

X) 


CO 

fa 

O 

O 

cd 

o 


o 


Q> 


U 

U 

CJ 

•H 

d) 

u 


CO 

cj 

fa 

fa 

o 

rH 

0( 

fa 


cd 

cd 



CO 

rH 

a 



fa 

•H 

r-1 

rH 

u 

•H 

cd 

rH 


O 

rH 

cd 

cd 

d) 

0 

fa 

cd 


M 

•H 

CJ 

G 

fa 

V-/ 

CJ 

C! 


G 

> CO 

O 

O 




O 


fa 

•h a) 

•H 

•H 

d) 

4J 

d) 

•H 



(J o 

00 

00 

rH 

G 

ofl 

OC 


>N 

•H 

d> 

<U 

JO 

d) 

cd 

0) 



rH > 

fa 

fa 

cd 


4J 

fa 

CO 

cd 

cd U 



CO 

So 

CJ 


T— 

4-» 

U d> 

CO 

CO 

O 

o 

d> 

CO 

<1> 

•H 

d) CO 

CO 

CO 

fa 

rH 

o 

CO 

> 

rH 

T) 

o 

o 

CO 

fa 

u 

o 

<D 

•H 

d) 

H 

M 

•H 

0 

d) 

M 

« 

2 

fa 

O 

o 

Q 

fa 

fa 

O 


300 


Gross National Product ($1958) 2.7 1.3 4.4 4.8 




Budget B ($59.4) Solution - Southern Region 
(billions of current dollars, except where otherwise indicated) 


ACDA/E-156 


CM 


CO 

CO 

O 

CM 

rs 

CO 

00 

rs 

m 

CO 

on 

• 

• 

• 

• 

• 

rH 

CM 


rH 

CO 

o 




CO 

st 

CO 


</> 






sf 

st 


't m 

• • 

cm st 


rH 

I s *. 

m 

00 

o 

st 

rs 

vO 

m 

On 

rH 

in 

ON 

• 

0 

• 

• 

• 

rH 

CM 


o 

CM 

On 




CO 

st 

CM 


<jy 


st 

CO 


rH CO 

• • 

CM CO 


O 

ON 

NO 

uo 

CO 

00 

m 

^5 



ON 

CM 

co 

<t 

St 

CM 

NO 

00 

ON 

• 

• 

• 

• 

• 

• * 

• 

• 

rH 

CM 

St 

o 

o 

00 


rH 

rH 




CO 

st 

CM 





</> 









ON 

St 

o 

VO 

NO 

o 

CM 



NO 

O 

o 

00 

CM 

CM 

rH 

O 

NO 

ON 

• 

• 

• 

• 

• 

• 

• 

• 

rH 

CO 


On 

00 

NO 

St 

rH 

CM 




CM 

CO 

CM 





</> 
















Ht 









G 



CO 






G 



G 

T3 





Jh 



O 

G 








•H 

cd 





Hi 



> 






G 



u 

co 





"d 



G 

TJ 





G 



CO 

o 





G 




o 





rH 



T3 

o 

/TV 



CO 

G 

/—N 


g 


00 



Hi 

CJ 

00 


G 

4-! 

m 



G 


m 



o 

ON 




Hi 

ON 


co 


rH 



Hi 

O 

rH 


TJ 

CO 



a) 

O 

*H 



o 

g 

<J> 


B 

S 

Hi 

<J> 


o 

CO 

V-/ 


o 


PH 



o 

cd 



u 

4-1 





A 

P 

P 

G 

O 

a 

P 


4H 

o 

<J 

o 

tH 


o 

O 


o 

u 

3 

3 


CD 

Hi 

3 



3 

T) 

tj 

rH 

G 

4H 

TJ 


CO 

PH 

O 

o 

G 

O 


O 


G 


Hi 

Hi 

G 

•H 

G 

Hi 


co 

G 

PH 

PH 

O 

rH 

60 

PH 


cd 

cd 



CO 

rH 

G 1 



A 

•H 

rH 

rH 

M 

•H 

G 

rH 


o 

r—1 

cd 

G 

G 

a 

A 

G 


u 

•H 

G 

G 

P-t 

V/ 

CJ 

G 


0 

> CO 

O 

O 




O 


PH 

•H G 

•H 

•H 

G 

P 

G 

•H 



U O 

60 

60 

rH 

G 

6C 

60 



•H 

<L) 

G 

rO 

G 

G 

G 


M 

rH S> 


Ptf 

G 

a 

P 


CO 

«d 

cd Hi 



CO 


G 


rH 

P 

u cu 

CO 

CO 

o 

o 

G 

CO 

G 

*H 

0) CO 

CO 

CO 

PH 

rH 

U 

CD 

> 

rH 

T3 

o 

o 

CO 

PH 

Hi 

O 

G 

•H 

G 

H 

Hi 

♦H 

a 

G 

Hi 

A 

A 

lit 

o 

o 

Q 

w 

PH 

O 


301 


Gross National Product ($ 1958) 





ACDA/E-156 




CM 

vO 

rH 

CO 

00 

r~. 

r^. 







uo 

St 

rH 

CM 

o 

st 


NO 

rH 



ON 

• 

• 

• 

• 

• 

• 


• 

• 



rH 

CO 

<r 

CM 

st 

o 

St 


CO 

m 






CO 

st 

CO 








<JY 
















- 






T3 

rH 

r>» 

00 

o 

O 

CO 

st 





<U 

r*> 

co 

CM 

o 

CM 

ON 

CO 


rH 

vO 


44 

ON 

• 

• 

• 

• 

• 

• 


0 

• 


CO 

rH 

CO 

st 

rH 

CM 

00 

St 


CO 

St 


U 




CO 

St 

CM 






•H 


•CO¬ 










-d 











d 

d 











o 

*H 























60 

0) 











0) 

CO 
_ * 











PC 

•n 

£ 

O 

ON 

vD 

CO 

vO 

vO 

CM 




c 

£ 

r- 

rH 

tH 

o 

O 

«n 

CM 



vO 

Is 

0) 

ON 

• 

• 

• 

• 

• 

• 


• 

• 

<0 

42 

rH 

CO 

st 

o 

o 

n- 

st 


o 

rH 

42 

4-1 




CO 

st 

CM 





4J 

o 


</> 





















O 

0> 











CO 

Ml 












<D 











! 

42 












S 











(2 

O 

4J 

ON 

St 

O 

VO 

00 

CM 

CO 




ON *H 

cm 

NO 

o 

O 

00 

CM 

CM 

rH 


O 

VO 

•U 

0) 

ON 

• 

• 

• 

• 

• 

• 


• 

• 

w d 

o 

rH 

CO 

st 

ON 

00 

VO 

St 


rH 

CM 

J »H 

* 




CM 

CO 

CM 





cq o 

<u 


•co¬ 









< CO 












H 













CO 











vO 

Ml 








u 



• 

CO 








cd 



CO 

iH 


co 






<D 



ON 

»H 


<d 

”0 





>-< 



</> 

O 


o 

d 








v—' 

T) 


•H 

cd 





Mi 






> 






cd 



w 

44 


M 

CO 





T3 




(2 


<D 

T3 





d 



44 

0) 


CO 

O 





<D 



<d 

M 



o 




/—s 

rH 



O0 

Mi 


H3 

o 

✓“V 



CO 

cd 

/—N 



O 


12 


00 



Ml 

o 

00 

00 

o 

o 


cd 

MS 

in 



<D 


m 

m 

CP 




O 

ON 



4*5 

Mi 

ON 

ON 


CM 


CO 


rH 



M 

O 

rH 

rH 


O 


'O 

CO 



a) 

O 

-H 






o 

Q> 

•CO- 


B 

£ 

>s 

<J> 

</> 


CO 


o 

CO 

v-x 


o 


CH 


•w 


(2 


o 

cd 



a 

MS 





O 



42 

44 

4J 

d 

O 

6 

44 

44 


*H 


CM 

O 

O 

O 

M 


o 

O 

a 


rH 


O 

M« 

d 

d 


CO 

Mr 

d 

d 


rH 



2 

TJ 

TJ 

rH 

d 

MS 

03 



*H 


CO 

fH 

o 

O 

cd 

o 


O 

o 


42 


<L’ 


M 

u 

d 

-H 

<D 

Mi 

Mi 


V—«< 


co 

d 

CH 

CM 

o 

rH 

6C 

CH 

Ps 




cd 

cd 



CO 

rH 

d 






42 


rH 

rH 


•H 

cd 

rH 

rH 




O 

rH 

cd 

cd 

0) 

s 

42 

cd 

<d 




Ml 

*H 

d 

d 

CH 

V—' 

O 

d 

d 




d 

> CO 

o 

o 




o 

o 




P-i 

•H <D 

•H 

•H 

Q> 

44 

0) 

•H 

*H 





o o 

00 

60 

rH 

d 

6C 

60 

44 




>N 

•H 

CD 

CD 

42 


cd 

<D 

cd 




Ml 

rH > 

0£j 

P2 

td 

B 

44 

pc5 

Z 



CO 

cd 

cd w 



CO 


d 





rH 

■u 

U 0) 

CO 

CO 

O 

O 

3 

CO 

CO 



0) 

•H 

<D CO 

CO 

CO 

CM 

rH 

o 

CO 

CO 



> 

rH 

T3 

O 

o 

CO 

CM 

Mi 

o 

o 



0) 

•H 

<D 

M 

M 

•H 

B 

<D 

Ml 

Ml 



.-J 

a 

Pm 

O 

o 

Q 

pa 

CH 

o 

o 


302 





ACDA/E-156 


generated almost identical growth rates except for 1972, when the 
Budget E ($93.6) solution produced a significantly higher rate. 

Overall, both generated more growth but less stability than *"he 
Budget B ($59.4) solution. In the Budget B ($59.4) solution, low 
but steadily increasing growth rates were predicted, varying from 
1.0 percent to 2.4 percent. In the Control solution the variation 
was from 0.8 to 3.1 percent, while in the Budget E ($93.6) solution, 
the variation was from 0.7 percent to 3.6 percent. 

V.7 A SUMMARY OF THE RESULTS 

All three regions are expected to have decreasing shares of 
Federal expenditure on goods and services, accentuating or perhaps 
even causing their relative decline in the national economy. In con¬ 
sidering three military spending options for three regions over four 
years, only one regional economy was predicted to match national per¬ 
formance—the Northern region*s Budget B ($59.4) solution in 1970. 

In a general comparison of the three expenditure options con¬ 
sidered here, several conclusions can be drawn. The first is that when 
overall growth is considered, there are few surprises. Budget E ($93.6) 
policies generate the highest rates, followed by the Control solution 
and the "peace 5 ’ strategy reflected in the Budget B ($59.4) solution. 

The results show this for all three regions. However, the growth 
rate declines in the face of increasing national growth for 1972 in 
the Northern and Central regions* Control solutions and in the Northern 
Budget E ($93.6) solution. 

Second, with reference to the stability of regional growth, the 
predictions for the Central and Southern Budget B ($59.4) solutions 
avoid the decline in the rate of growth predicted for the national 
economy for 1970 and predict a rise instead. In the Control and 
Budget E ($93.6) solutions, the regions all join the nation in de¬ 
clining growth rates for 1970. However, no negative growth rates 
are predicted, even though the Central region comes close with only 
0.2 percent growth predicted for 1970. 

Thus it appears that the regional economies of the Northeast 
Corridor can absorb any of the three policies considered without grave 
setbacks. The "peace" alternative, presented as the Budget B ($59.4) 
solution, shows unspectacular but steady economic growth. The find¬ 
ings of Klein and Mori for the national economy can be echoed for the 
sub-regions of the Northeast Corridor: they can well afford peace. 


303 


ACDA/E-156 


THE COMMUNITY IMPACT OF MILITARY INSTALLATIONS 


Darwin W. Daicoff 


VI.1 INTRODUCTION 

Much recent research has been directed toward analyzing the effects 
of military installations on adjacent communities. The analysis has 
been performed from two distinctly different viewpoints: 1) the impact 
of a new or expanded installation, and 2) the impact of a reduction or 
closure of an established base. This chapter considers impact studies^ - 
of military installation location, relocation, or discontinuation which 
have occurred since 1960. This consideration of prior studies is under¬ 
taken so as to provide a basis upon which to judge the consequences of 
the cessation of Vietnam hostilities and of some agreement on arms 
limitation. The consequences singled out for special attention relate 
to communities which have military installations located nearby—it is 
thus one aspect of a regional economic analysis. 


The studies vary from unfunded M. A. theses and Ph.D. disserta¬ 
tions to handsomely financed research done by institutes and universi¬ 
ties in cooperation with government agencies. Paul C. Callan, "The 
Economic Impact of Fort Detrich on Fredrich, Maryland" (unpublished 
Master’s thesis. University of Maryland, 1967); Darwin W. Daicoff, 

"Phase I, Community Impact and Adjustment," Volume I and University of 
Kansas, "Specific Community Impact Studies of the Discontinuance, Re¬ 
duction or Consolidation of Defense Activities," Volume II, The Economic 
Impact of Military Base Closings , Prepared for the U.S. Arms Control and 
Disarmament Agency (Washington: Government Printing Office, ACDA/E-90, 
forthcoming); Headquarters First Strategic Aerospace Division, Economl c 
Impact on the Local Economy (Vandenberg Air Force Base, California, 

1965); James M. L. Karns, An Intertemporal Analysis of the Defense Im¬ 
pact Upon a Local Community: Case Study of El Paso County, Colorado 
(Project 7904) (Office of Aerospace Research USAF, 1968); Lawrence Laben, 
"The Economic Impact of a Military Base," New England Business Review 
(Boston: The Federal Reserve Bank of Boston, 1961); John E. Lynch, 


304 










ACDA/E-156 


In order to analyze the impact of a particular entity, regional economics 
has at its disposal two main techniques—an economic base analysis and a 
tire series approach. In order to produce economic base results of ac¬ 
ceptable accuracy very substantial time and effort are required for the 
analysis. As a consequence, we find very few communities able to per¬ 
form such an analysis. Because of this a time series approach is the 
analytical technique used almost exclusively. 

C^^tain limitations are inherent in the time series approach. The 
impact of an extant military installation is often difficult to assess 
especially if the installation has been present for some time. In such 
cases the amounts of military payrolls and procurement have been used as 
proxy measures of the impact of military activity on the local economy. 

In areas where installations have been recently established or augmented 
a time series measurement is feasible. Because adequate data can be 
developed to assess the local economy before and after the advent of the 
military in the area, a comparative static analysis can be performed. 

> 

When military activities are sharply curtailed or eliminated, a 
unique situation is created. Through measurements and observations of 


1 

(Cont.) Local Economic Development After Military Base Closures 
(New York: Praeger Special Studies, 1970); R. A. McAuliffe, The Salina 
Story: Swords into Plowshares (Washington: Office of the Secretary 

of Defense, 1966); John David McKittrich, ’’Redevelopment of an Airbase” 
(unpublished Master’s thesis, Clemson College, 1968); National Planning 
Association, Community Readjustment to Reduced Defense Spending: Case 
Study of Potential Impact on Seattle-Tacoma, Baltimore and New London- 

Groton-Norwich , U.S. Arms Control and Disarmament Agency Publication 
No. 33 (Washington: Government Printing Office, December, 1965); Kyohei 
Sasaki, ’’Military Expenditures and the Employment Multiplier in Hawaii,” 
Review of Economics and Statistics , Vol. XLV, No. 3 (August, 1963), 
pp. 298-304; Secretary of Defense, Productive Civilian Uses of Former 
Defense Department Installations (Washington: Office of the Secretary 
of Defense, 1964); Secretary of Defense, The Challenge of Change , 
(Washington: Office of the Secretary of Defense, 1965); Thomas M. 
Skillman, ’’The Economic Impact of Shaw-Sumter County, South Carolina',’ 
(unpublished Master's thesis, Clemson College, 1963); Ian Donald Terner, 
The Economic Impact of a Military Installation on the Surrounding Area: 

A Case Study of Fort Devens and Ayer, Massachusetts (Boston: The Federal 
Reserve Bank of Boston, 1965); Claude B. Thompson, "An Economic Apprais¬ 
al of the Effect of Donaldson Air Force Base upon Greenville, South 
Carolina” (unpublished Master’s thesis, Clemson College, 1962). 


305 

















ACDA/E-156 


the various sectors and of the aggregate, the importance of the instal¬ 
lation in the local economy can be estimated. These measurements should 
assist in predicting whether a particularclosure will create a serious 
economic disturbance or whether the community will be able to adjust 
with a minimum of difficulty. In addition to the usual variables con¬ 
sidered in economic analysis, community efforts specifically initiated 
to offset the impact of the curtailment in military activity partially 
change the character of the situation. Thus the scene must be viewed 
with consideration for the reaction of private economic units as well as 
for the actions taken by the community to soften the adverse economic 
effects of the curtailment. 


VI.2 GENERAL DISCUSSION 

The impact of a military base on the surrounding economy is differ¬ 
ent from that of a private industry.^ Because defense installations are 
largely staffed by military personnel, the workforce for the installa¬ 
tion is substantially supplied from outside the local community. As has 
long been the practice, when the usefulness of military personnel has 
ceased at one location, they are transferred to another site. It is 
this transferability of the military population which limits the impact 
of a change in the level of operation of a military installation. 

The payrolls earned by military personnel may, particularly if the 
base is relatively isolated, have little or no local impact. Installa¬ 
tions not located near large cities often procure only very small por¬ 
tions of their supplies and materials in the local area. The presence 
of a base post-exchange and commissary may substantially reduce sales 
of local businesses in similar activities. Because of their social and 
economic character, employed military dependents tend to be secondary 
wage earners who exhibit a mobility parallel to that of the head of the 
household. These factors help explain the minimal economic consequences 
of many military installations on communities located near them. 

In addition the recent American phenomenon of greater geographic 
mobility of the civilian population has also lessened the impact of the 
changes in the scope of military facilities. The DOD civilian work 
force has exhibited a high degree of mobility in connection with the 
recent changes in the level of civilian employment at certain military 
installations. Large scale transfers of employees, through elaborate 
transfer programs, have been an integral part of the operation. 

In each base closure the particular circumstances which surround 


Lawrence Laben, op. cit. 


306 




ACDA/E-156 


the affected or impacted community influence its economic adjustment. 
This set of circumstances includes the size, structure, and geographic 
location of the community as well as the set of attitudes peculiar to 
the community. The size and economic diversification are at least in 
part directly related to the community's ability to adjust. As might be 
expected, the larger and more economically diversified the community the 
greater its stability in the face of fluctuation of exogenous forces 
such as changes in military activities. Any impact will also be mag¬ 
nified if the community is distant from a large metropolitan area. Thus 
the seriousness of the loss or gain of a number of jobs in a community 



upon the size and situation of the individual com¬ 


munity . 


Likewise, the type of military installation involved determines the 
magnitude of the impact. 3 4 For example the inherent differences in input 
requirements between a Strategic Air Command base and a shipyard dictate 
different demands on the adjacent area. The primary factors influencing 
this demand are 1) the relative size of the military and the civilian 
components of base personnel and 2) the facilities included at the in¬ 
stallation. Air Force Bases which are designated as SAC headquarters 
include excellent air strips and auxiliary airport facilities. They are 
typically of only moderate size and are often located near small, some¬ 
what rural communities. By virtue of their function as a primary de¬ 
fense unit they are staffed by a large number of military personnel and 
only small numbers of civilian employees. A large proportion of the 
military personnel at such bases are enlisted men. Of these a substan¬ 
tial percentage have only small families or are unmarried. In contrast 
installations such as shipyards are typically of substantial size and 
often within or adjacent to large metropolitan areas. Such installa¬ 
tions are primarily concerned with production and maintenance and in¬ 
volve a large civilian component with a relatively small military com¬ 
plement. It is these differences that have been shown to account for 
the variations in the economic relationship among defense installations 
and the communities near them. 


VI.3 EXTANT INSTALLATIONS 


A substantial number of studies seek to measure the importance of a 
military installation to a locality. The typical study measures the 


3 

Darwin W. Daicoff, op. cit. 

4 

Lawrence Laben, op. cit . 
^University of Kansas, op. cit. 


307 






ACDA/E-156 


patterns of personnel spending, housing and local procurement. These 
patterns are then related to the structure of the local economy. By 
studying an extant installation one is able to measure the actual depen¬ 
dence of an area on the defense installation. This is worthwhile infor¬ 
mation, but should not be confused with the findings of studies which 
analyze the consequences of fluctuations in the activity at an installa¬ 
tion, for these latter studies quantify the consequences of the fluctua¬ 
tion. 


Both the amount of installation purchases in the area and spending 
of base personnel influence the impact which an installation will have 
on the region. It has been found that the spending habits of military 
personnel are largely a function of their marital status. Though their 
spending pattern approximates that of civilian personnel in most respects, 
two factors modify the community impact of the spending. First, most 
military installations provide housing on the base for at least a portion 
of the enlisted men and officers exclusive of the local housing market; 
this helps to limit the effect of massive and sudden shifts in military 
activities. Second, much of the purchasing done by military personnel 
whether housed on the base or in the community is concentrated in the base 
commissary or the post exchange and base recreation facilities—estimates 
range between 1/3 and 1/2 of total purchases. Thus, it can be said that 
military personnel have a definite tendency to consume goods and services 
supplied at their respective base facilities while their counterpart, 
the civilian employee, is more typically a patron of local stores and 
service establishments. Thus, the magnitude of the area or regional 
effect due to the existence of a military installation will be a function 
of both the mix and the number of civilian and military personnel. 

It is significant that military families are more important to the 
local economy than are bachelors or married men whose families are not 
with them. Military families tend to live in the community and to spend 
most of their incomes in the community. Single men usually live on the 
base; in addition various studies show that they tend to spend mainly on 
the base or to migrate to nearby large cities. 

In Terner’s review^ of the spending patterns of military personnel 
at Fort Devens, Pease AFB and a number of other bases the following 
generalizations were established: 

1. Food and housing accounted for almost 60 percent of the budgets 
for married personnel with only five to six percent allotted for 
entertainment and recreation. 


Ian Donald Terner, pp. 65-66. 


308 


» 



ACDA/E-156 


2. By way of contrast, 70 percent of the budgets for single per¬ 
sonnel was allotted to entertainment, recreation, transpor¬ 
tation, and savings. This large amount was possible since 
board and room was almost totally supplied by the military. 

3. Married personnel spent nearly 40 percent of their total bud¬ 
gets at the military installation facilities (commissaries, 
etc.) with varying percentages of the total spent in neighbor¬ 
ing communities. 

4. The spending of single men could not be grouped as it varied 
both in type and in the proportion expended on and off base. 
Terner suggests that the spending will be influenced n by the 
relative offerings of the installation and the town.'^ Other 
studies substantiate this argument and further suggest that 
when a large city is in the vicinity of the installation the 
bulk of single men’s off-base spending will be concentrated in 
metropolitan areas. 

As might be expected the relative spending is also somewhat influ¬ 
enced by the residence of the personnel. Thus the personnel who reside 
on or near the installation spend greater proportions of their income 
on the base and, conversely, smaller proportions in the community. 


Though the local purchases of a base constitute a positive economic 
factor for the community, the bulk of maintainance costs are often ex¬ 
pended outside the immediate vicinity. The proportion of installation 
spending that occurs within the local community is dependent on both the 
requirements of the base and the facilities of the community. The ex¬ 
treme situation occurs when a base has almost every commodity and ser¬ 
vice purchased from firms located a considerable distance from the base. 
In this case local procurement adds little or nothing to the locality. 
There is some evidence to suggest that base construction spending does 
result in a significant local impact. Still, though not often a major 
economic addition to the community, the base’s local purchases coupled 
with the influence of the private purchases made by military personnel 
can serve to significantly buoy the local economy. 


In spite of the increased sales, particularly in the service sec¬ 
tor, the existence of a military installation has not proven to be a 
special impetus to expansion of other economic activity in the region. 


^Ian Donald Terner, p. 66. 

g 

Darwin W. Daicoff, op. cit .; and Thomas M. Skillman, op. cit. 


309 





ACDA/E-156 


Rather, it seems to lead to a feeling of complacency in the community 
which discourages further efforts to broaden the community f s base. In 
addition, the workforce which would have been available in the area may 
be comfortably employed by the DOD. Thus the workforce which would be 
required to attract new industry is not available. In remote and slow 
growing communities the military did provide much needed diversity but 
the real economic effects of the installation were concentrated in the 
retail trade, personal service, and housing sectors where some local 
employment was a result of sales to base personnel. 

To some extent the community f s attitude toward the defense estab¬ 
lishment accounts for the community's economic strength. The consen¬ 
sus of researchers who have looked at this matter is that the existence 
of the installation in the community acts to dampen the community's 
initiative toward seeking new economic growth-producing activities. 
Especially since the recent well-publicized economy moves by the Pen¬ 
tagon which resulted in the closing of a number of bases, the attitude 
of the communities near other DOD facilities has not been favorable 
toward their expansion. The townspeople are somewhat chary of a repe¬ 
tition of the DOD closures and are thus reluctant to initiate public 
or private investment projects. This has lead to observations that 
the presence of military activity can serve to dampen community willing¬ 
ness to enter into new economic ventures. This lack of community in¬ 
centive toward independent growth is indeed unfortunate since every 
case study has shown that the success of a community's struggle to sur¬ 
vive the economic impact of the closure of a military installation de¬ 
pends largely on the community's ability to grow and diversify on its 
own, exclusive of the military influence. 


VI.4 CURTAILED INSTALLATIONS 

A study of the dependence of a community upon a nearby defense in¬ 
stallation provides useful information in the event of a base closure. 
For example, it should provide data on the particular sectors which 
have been bouyed by military spending. It also may provide a clue as 
to whether the presence of the base has given the community a false 
sense of security. Thus, it is important to examine the pattern of 
closure, the pattern of reaction, and the pattern of redevelopment. 

As stated at the beginning of this chapter, the purpose here is 
to provide a basis upon which to estimate the local consequences of 
cessation of hostilities in Vietnam and of arms limitation agreements. 
The DOD Cost Reduction Program has lead to the curtailment of activity 
at a large number of military installations. The parallel is obvious: 
a reduction in military spending should again involve base closures. 


310 


ACDA/E-156 


An understanding of the economic consequences which have been shown 
to result from previous base closings will have direct relevance to 
the contemplated reduced military spending. 


VI.4.1 Pattern of Closure 

Under the DOD closure policies various amounts of lead time were 
given, different bases in hopes that this advanced warning would allow 
for better preparation and planning by the community. The optimum 
lead time appears to be about one year between announcement and actual 
closure. In cases where much longer lead time was allotted, the re¬ 
sult was often stagnation of efforts to organize recovery efforts and 
false speculation about a possible future for the installation. Though 
this lead time was designed to facilitate a systematic removal and/or 
disposal of equipment and facilities to other governmental or private 
sources as well as the transfer of personnel, extended lead time re¬ 
sulted in thwarted community plans. In most of the cases involving 
excessive lead time, long before the military evacuated the facilities 
the community succeeded in arousing interest from private firms re¬ 
garding their possible use of the soon-to-be-vacated military facili¬ 
ties. The discrepancy between the timing of the availability of the 
facilities and of their potential use delayed effective community ef¬ 
forts to replace the military with civilian economic activity. 

Before considering the community pattern of reaction to the clo¬ 
sure of the bases, it is advantageous to review the provisions made by 
Federal agencies to promote the smooth transfer of installations from 
military to civilian control. When an installation is closed, the ob¬ 
ject is to convert the entire facility to private or local governmental 
ownership as quickly as feasible and yet to protect the Federal invest¬ 
ment in the facility. Though the General Services Administation over¬ 
sees much of the disposal of surplus military equipment and property, 
the Office of Economic Adjustment (OEA) in DOD is charged with facili¬ 
tating the transfer in areas where the magnitude of the impact is anti¬ 
cipated to be great. 

The OEA was established in 1961 under the Assistant Secretary for 
Installations and Logistics of the DOD.^ It aids communities in 


9 

Darwin W. Daicoff, op. cit. 

^Secretary of Defense, Productive Civilian Uses of Former Defense 
Department Installations ; and also The Challenge of Change . 


311 









ACDA/E-156 


planning for productive and advantageous local usage of the facilities 
freed by DOD decisions to close or reduce a military installation and 
participates with the community from the planning through the actual 
transfer of the military properties to civilian uses. In addition, 
the OEA has the responsibility of coordinating the activities of the 
Federal government with those of the affected community. 

The OEA officials work together with representatives from various 
other Federal departments and agencies: The General Services Admini¬ 
stration; the Departments of Commerce, Labor, Interior, Agriculture, 
and Housing; the Home Finance Agency; and the Small Business Admini¬ 
stration. This group functions as a part of the Select Advisory Com¬ 
mittee to the Secretary of Defense and allows for the coordinated and 
integrated disposition of military properties. It not only functions 
as an avenue for disposition but also as a planning agency to inform 
area planners of the various possibilities which exist and to help the 
local communities cut through the red tape involved in such transfers. 
It is only through such coordinated work between Federal, state, and 
local agencies that the transfers can be done economically, efficient¬ 
ly, and most advantageously for the area and for the Federal govern¬ 
ment. 


11 


In addition, the Inter-Agency Economic Adjustment Committee, 
announced by President Nixon in March 1970, is charged with bringing 
the resources of the Federal government to bear on the alleviation, 
of economic difficulties caused by necessary Defense realignments. 

The committee is to assist individuals and communities in cases where 
adverse economic impacts occur as a result of the revision of the 
nation’s military base structure. While it is not yet clear how this 
responsibility will be discharged; the existence of the committee 
indicates the Federal government’s concern. 


VI.4.2 Pattern of Reaction 

It is now appropriate to consider the reactions of the various 
communities to the closure of nearby military installations. ^ With 


This committee is chaired by the Secretary of Defense and is 
made up of the Secretaries of the Interior; Agriculture; Commerce; La¬ 
bor; Health, Education, and Welfare; Housing and Urban Development; 
Transportation; the Administrator of the General Service Administra¬ 
tion; and the Chairman of the Council of Economic Advisers. 

12 

Overall pattern established by Darwin W. Daicoff, "Phase I, 
Community Impact and Adjustment." 


312 





ACDA/E-156 


only few exceptions such as Donaldson AFB^^ where it was long under¬ 
stood that closure was imminent, the communities learned of the im¬ 
pending closures through a ’'bombshell" announcement issued by the 
DOD. Before the formal announcement closure decisions were very 
closely kept secrets; there was little to indicate that any installa¬ 
tion would be slated for closure. The citizens were psychologically 
unprepared for the announcement of what they immediately perceived as 
economic disaster. Momentary panic was the typical reaction. 

In an immediate backlash reaction congressmen and city leaders 
made block appeals to the DOD to rescind the decision. Though a very 
few of the areas succeeded in securing a modification of the closure 
decision, it was not in the form of a change in the order to close the 
installations but rather to offset the closure by creating new military 
activities at these installations. In a few cases such as Hunter AFB 
at Savannah, Georgia-^ and Amarillo AFB at Amarillo, Texas,the in¬ 
stallations were almost immediately assigned a new activity—one often 
related to the increase in U.S. military activity in Southeast Asia. 
Still for the great majority of the installations the announcements by 
the DOD stood firm and without offset. 

Soon after the immediate panic subsided, the city leaders began 
to realize the economic potential inherent in the closure. The op¬ 
portunity to work to secure permanent, private industry in lieu of the 
more temporary, military installation began to appear bright to city 
leaders. Extensive community campaigns were commonly inaugurated to 
enlist the support of the entire community in a unified effort to 
overcome the economic consequences of the loss of this portion of 
the economic activity and diversification in the community. This 
orientation was often a most potent force in the cohesive community 
efforts toward recovery. Soon the community consensus was that what 
had first been perceived as an ominous threat now was perceived to be 
a great aid to the city's potential for economic growth. 

This realization usually came at about the same time the final 
administrative announcement was made concerning the irrevocability of 
the closures. On community request the OEA entered to work with rep¬ 
resentatives of the local area to facilitate recovery activities after 
the decision to discontinue defense activities in a community had been 
made final. A major step generally involved the formation of a citi¬ 
zens' group which was made responsible for the economic adjustment 


13 

14 
13 


Claude B. Thompson* op. cit. 
University of Kansas , op. cit. 
Ibid. 


313 






ACDA/E-156 


processes of the community. An important function of the OEA was to 
establish liaison between community leaders and the various Federal 
agencies; the citizens 1 group or council was assigned the responsibili¬ 
ty of charting a course of redevelopment for the installation facili¬ 
ties based upon a realistic view of the community 5 s situation. In 
addition the council provided an organization with a legal status such 
that the Federal agencies had a proper local counterpart with which to 
deal. 


VI.4,3 Pattern of Redevelopment 

Ideally, a rapid release of the personal property, land and struc¬ 
tures by the DOD was followed by rapid community actions to put these 
facilities to productive use, but the process of deciding the future 
of the military properties was 1 often quite involved and required much 
time. All potential military uses for the defense facility and equip¬ 
ment were considered prior to the closure announcement, but even after 
the announcement other Federal uses had to be considered. 

The GSA has a critical role in the disposal of military property. 
While other executive agencies are determining whether excess property 
can be appropriately used to fill their needs and thus whether other 
Federal agencies should have the property or whether it should be dis¬ 
posed of as surplus, GSA inspects the property and arranges for an ap¬ 
praisal of its value. After the method of disposal has been decided, 
the appraisal provides a means of determining the basis for negotiated 
transfers to non-Federal public agencies as well as a guide for evalu¬ 
ating the adequacy of bids received in competitive bid sales offerings. 

Regulations governing the disposal of surplus real property pro¬ 
vide for the sale of the facilities to public organizations for ap¬ 
proved public uses with discounts from the fair market value of the 
property. The discounts for public agencies in acquiring surplus real 
property are as follows 

Public Park or Public Recreational Area 
...50 percent of the fair value. 

Historic Monument 

...Without monetary consideration. 

Public Health or Educational (particularly those devoted to aca¬ 
demic, vocational or professional instruction) 

_ ...Up to 100 percent public benefit allowance. 

16 

General Services Administration, Disposal of Surplus Real Prop¬ 
erty (Washington: General Services Administration, 1966). 


314 






ACDA/E-156 


Wildlife Conservation 

...Without consideration. 

Public Airport 

...Without consideration. 

Surplus properties not utilized by public agencies or institutions are 
ordinarily offered for sale by GSA on a competitive bid basis. The 
actual operation of the disposal procedure is such that almost all of 
the facilities come to be owned by approved local agencies for approved 
purposes. Thus the Federal government often does not receive much re¬ 
numeration for the assets but does secure a use for the facilities 
consistent with the objectives of Federal policy. 

Arrangements for disposition are generally controlled by the 
community under the direction of groups of community leaders which 
worked in cooperation with the OEA. The primary objective of the council 
has usually been to replace the lost military activity with other ac¬ 
tivity. In certain cases this end was furthered by the type of 
facility vacated by the military. Often the newly-vacated facility 
included an excellent air strip and auxiliary buildings; in almost 
every community it was the transfer of these air facilities to muni¬ 
cipal or local control that offered a great boost to the area by 
providing a ready-for-use free airport to the city. 

Other specialized facilities freed for local public or pri¬ 
vate use were base hospitals and special classroom areas .^ There 
were actual operating hospitals which became available for immediate 
municipal, state or private use. The hospitals were nearly always 
retained in medical or semi-medical uses—that is as a functioning 
hospital, a training hospital or rehabilitation center. Though such 
use commonly did not impart a particularly great positive economic 
impact on the city, this re-use can be viewed as a community 
advantage since the community gained a valuable piece of social over¬ 
head capital. 

Though not restricted to those buildings specifically design¬ 
ed for academic instruction, a very major portion of the re-use of 
military facilities in almost every area (except installations such 
as Presque Isle AFB where an industrial park was formed) was devoted 
to academic purposes.^-® In conjunction with the educational activity 


■^Secretary of Defense, The Challenge of Change ; and University 

of Kansas, op, cit . 

1 8 

Darwin W. Daicoff, op, cit . 


315 






ACDA/E-156 


the military quarters were often transferred to dormitory use. Edu¬ 
cational institutions which located on vacated military bases ranged 
from vocational and technical institutes, such as training institutes 
for state troopers, to junior colleges and satellite campuses of large 
state universities. Often the type of educational facility was more or 
less tailored to the area so as to meet its special needs; this is 
illustrated by the large number of vocational and technical education 
centers which were established on the closed military installations. 

The remainder of the properties and lands of the installations 
were most often sold to private industry. These properties are 
commonly segmented into easily handled land units which can be used 
separately or grouped together in large packages as they are needed. 

The structures in these areas can consist of various storage and 
meeting buildings. In addition large machine shops are often available; 
installations such as ship yards contain a large number of such work 
shops. As the process of site selection and the completion of trans¬ 
fer arrangements are sometimes very time consuming, it is not unusual 
for the first use of the installation to be a local or state govern¬ 
mental project such as an airport or school facility with private 
industry moving in later. Though public agencies can often operate 
without a clear deed to the land, private industry is usually delayed 
until the entire installation is vacated allowing it to obtain the 
facilities permanently. 

In all cases the communities which have secured the greatest 
amount of re-use of base facilities have taken the greatest strides 
toward economic recovery. Not only have the economies achieved 
stability but also a more diversified base of activities. Most often 
the total re-use of the available facilities was accomplished by the 
individual use of small parts of the facility. Each use was con¬ 
tracted for by the individual organization in accordance with its own 
particular set of requirements. In other cases large parts of the 
installation were taken over by one firm such as the Boeing Company 
or the American Machine and Foundry Company. In one case the situation 
was unique; the entire installation facility that formed the former 
Presque Isle AFB—Presque Isle, Maine was converted to the Skyway 
Industrial Park in a complete utilization of the facility's potential. 

In conclusion, re-use of the facilities vacated by the military 
has often played a most important role in the economic adjustment 


19 


University of Kansas, op. cit . 


316 




ACDA/E-156 


of a community. In communities where much private and local public 
re-use of military facilities occurred, economic recovery has been more 
rapid than in those where re-use has been minimal. In many cases the 
first and predominant re-use was by state and local government agencies. 
Many municipal airport organizations took control of the available 
airstrips and the accompanying facilities, which resulted in a marked 
increase in the community’s potential for air transportation and air 
f re i&ht and directly created an availability of industrial properties. 

In addition academic re-uses of the facilities were prevelant. Not only 
were vocational training centers popular, but universities as well 
sought relief from over crowded conditions by establishing satellite 
campuses. 

Actual re-use of the available facilities varied from one instal¬ 
lation to another. The importance of the amount of re—use was largely 
a function of the size of the community. In small communities, military 
expenditure often constituted a major portion of the economic activity. 
When the military left, new industrial activity was required to restore 
the health of the economy. In metropolitan areas the removal of the 
military did not create as severe a vacuum in the economy; thus, re¬ 
placements were not as essential for the continued viability of the 
community. 

VI.4.4 Other Economic Activity 


As an alternative and/or addition to the re-use of base facilities, 
increased industrial activity outside the military installation also 
produced the needed upsurge in economic activity. The promotions 
aimed at utilizing base facilities and land usually were successful in 
obtaining interest in private industry outside the base, also. In¬ 
stances such as that in Moses Lake, Washington where some new manu¬ 
facturing activity located in the community but no significant re-use of 
the installation facilities occured were rare. 20 Most often private 
industrial expansion which occurred off-base was rather more than 
would have been expected on the basis of pre-closure trends. In 
addition to the coordination of the disposition of the base properties, 
the citizens’ council often acted in less conventional ways to aid the 
community. York, Pennsylvania near the Naval Operations Plant was 
unique in that the city council was instrumental in the creation of the 
York County Industrial Development Corporation which acted to offer 
low-cost finance to aid construction of homes and especially the con¬ 
struction of small business facilities. Other cities such as Salina, 


20 


Ibid. 


317 





ACDA/E-156 


1 


Kansas (Schilling AFB) established a local private investment organi¬ 
zation to finance quasi-public structures such as convention centers. 
This activity was instrumental in bolstering the confidence of the city; 
the psychological impact of backing a "community project" often pro¬ 
vided the incentive for private citizens to make other efforts which 
aided in stabilizing the local economy. 

VI.4.5 The 1964 Closures 


From the DOD f s initiation of the Cost Reduction Program in early 
1961 through fiscal year 1969 over 1,110 actions have been taken to 
realign the functions of the nation’s military installations. These 

actions have resulted in the release of nearly two million acres of 
land and the elimination of 217,602 DOD jobs. Though these actions have 
occurred throughout the time period since 1961, the largest number 
occurred in 1964-1965. Of these the most significant block of closures 
were those announced by the DOD on November 18, 1964 affecting 15 
foreign installations and 80 domestic installations. Though this 
number represented only about one percent of the total, the action 
accounted for large portions of the total realignment activity (see 
Table 1). About one third of the total number of job eliminations and 
over a fifth of the total released acres were the direct result of 
these actions. The DOD estimates that these resulted in an annual 
saving of $1.7 billion—a figure which represents a quarter of the 
total savings realized. 

A major study of the realignments dictated by the November 18, 

1964 announcement was sponsored by the U. S. Arms Control and Disarma¬ 
ment Agency.^2 in this study selected closures were analyzed in great 
detail. Since these actions were among the largest, they probably 
produced the greatest impact; a review of some of the conclusions from 
this study is quite appropriate and applicable to the analysis of post- 
Vietnam adjustment problems: 

1. After the Announcement some of the affected areas continued 
to grow while some declined. In those areas where the direct reduction 
of employment due to the installation closure represented five percent 
or more of the community’s population, significant, detrimental 
economic impact occurred most often. 


while a lack of detailed data prevents a complete analysis of 
the post 1968 actions, it is known that they have been significant. 

For example, on March 6, 1970 the DOD announced 371 actions designed to 
reduce expenditures by $914 million and expected to eliminate 35,000 
military and 58,600 civilian positions. 

22 

Darwin W. Daicoff, op. cit . 


318 





ACDA/E-156 


TABLE 1 

Comparison of 1964 Announcement With 
the Total as of FY 1968 



November 18, 1964 
Announcement 3 

Total Through 
FY 1968 b 


Number of Actions 

95 

1,110 


Jobs Eliminated 

63,401 

217,602 


Annual Savings 

(millions of dollars) 

$477 

$1,700 


Acres Released 

376,720 

1,849,000 



SOURCES: ^OD press release on November 18, 1964. 


department of Defense Cost Reduction Journal , 
Vol. V, No. 1, (Winter 1968-1969), p. 63. 



319 







ACDA/E-156 


2. No identifiable pattern of change in employment growth 
relative to either the magnitude or the timing of the closure was 
evident in any of the communities in which the reduction in employ¬ 
ment was relatively large. 

3. An announcement made in a flourish of excitement followed 

by a swift pattern of closure seemed to incite the townspeople to unite 
to work for the common goal of recovery from the economic impact of the 
base closure. 

4. The formation of a citizens* committee was valuable to 
appraise and to plan the possible course of action required for the 
planning of the disposition of the installation; these plans included 
utilization of the properties by both local government and private 
industry. 

5. A pattern of swift closure of installations and the rapid 
transfer of the operation and ownership of the base from military to 
civilian hands after the Announcement facilitated the community’s 
efforts to recover from the economic impact of the closure, 

6. Success in securing re-use of the facilities was severely 
handicapped when the military retained control for considerable time 
after the Announcement. Coupled with Federal inaction, the adminis¬ 
trative delay involved in military transfers left the city unable to 
act under its own authority in regard to matters concerning the 
installation facilities. 

7. Public facilities often provided immediate offsetting activi¬ 
ties for the community. Local, state and Federal programs can be 
utilized; they are especially valuable as they can be pressed into 
operation more quickly than can private enterprise. In future cases 
such programs could be planned before the actual closure of the 
installation so that new activities could begin immediately upon the 
withdrawal of military operations. 

8. In cases where large air strips were converted to municipal 
control, the increased availability of transportation and freight 
facilities acted as a positive attraction to private industry. 

9. In cases where incentives to new industry (including subsi¬ 
dies, tax reductions, extension of public utilities, or re-zoning of 
municipal areas) were required, community-wide support had to be 
secured so that these inducements could be offered. This was one of 
the causes of greater delays in private use of released facilities as 
opposed to public use. 

10. Securing new jobs equal to the DOD employment may not fully 
compensate the loss suffered by the community due to the closure of 
the military installation. If these replacement jobs are low wage, 


320 


ACDA/E-156 


there may well be a loss in total income. In a somewhat similar vein, 
if the replacement jobs are "women’s jobs ,’ 1 a loss can occur. 

Finally the diversification of the community can be reduced. Thus a 
type of community adjustmen t to the removal of the military installation 
often appeared rather than a community recovery . 

1 --. The housing sector presented difficult problems in each of 
the communities. Vacancies and subsequent deterioration were particu¬ 
larly severe for low-cost housing. Because of the depressed condition 
of the housing market, many homeowners who were transferred with the 
military operations were forced to default on their mortgages.23 

12. Relatively little unemployment resulted from the closures 
for two reasons: a) great efforts were made to effect large scale 
transfer and relocation of civilian personnel, and b) many local jobs 
were vacated by DOD personnel and their dependents. Thus employment 
opportunities became available to the small number of local persons who 
became unemployed either as a direct, or indirect result of the 
reduction in military activity. With the aid of the DOD’s relocation 
program, employment problems were largely self-correcting. 

13. The larger metropolitan areas made the transition with 
relative ease while the economy was kept on a high level. The smaller, 
more isolated areas had to be backed by a much stronger push from 
community action in order to acquire replacement activities that would 
keep the economy sufficiently diversified and also maintain community 
employment at a desirable level. 

14. The community reaction to the Announcement constituted a 
definite pattern in all cases: 1 ) disbelief, 2 ) efforts to rescind the 
decision, 3 ) !, open panic, H 4 ) resignation to the inevitable and 5 ) 
decision that the closure was probably, on balance, advantageous for 

f-U ry /> /MTiTf 

6W^W44V*Hjf • 

15. If the military retained control of the base long after the 

Announcement, the reaction included another step (sometimes before and 
sometimes after stage 5): 4a) discontent with planning for the reuse 

of base facilities while the facilities were still occupied by the 
military. If the military relinquished control, a final stage 
occurred: 6 ) relative satisfaction after the negotiations ended. 


23 

Even this effect could be reduced if an appropriation were made 
to implement the DOD Homeowners’ Assistance Program which authorizes 
a policy of easing the impact of transfers on the housing market. 


321 









ACDA/E-156 


/ 


16. At the date of Announcement the local military authorities 
produced data on the amount of spending in the communities for base 
procurement and data on military and civilian payrolls. These were 
used to identify the magnitude of the reduction the community would 
face. In almost no instance, however, were such data available for 
any extended time period. A relatively simple procedure should be 
established to develop those data for all military installations so as 
to facilitate analysis of the impact of military activity at the 
community level. 





17. The general level of economic activity in the nation may well 
account for a major portion of the success that these communities have 
had in offsetting the effects of the installation closures. The adjust¬ 
ment experience might have been significantly different had the 
national economy been less robust. 


VI.5 CONCLUSION 

The study of the closure of various military installations lead 
to the conclusion that the presence of a defense facility in a com¬ 
munity does not necessarily impart a permanent influence on the 
community with which it is associated. While the installation is 
active, it contributes people, dollars, and activity to the community, 
but this in itself does not change the community^ potential to carry 
on a high level of activity without the defense installation. 

Superficially these conclusions may seem to be in some conflict 
with the analyses of the impact of the entrance of installations into 
the economy which indicate that the military installation is an im¬ 
portant force in the community. This conflict is, however, more ap¬ 
parent than real as it involves the presupposition that the removal of 
military spending upon which some portion of local economic activity 
has been dependent will result in a predictable reduction of income 
and employment in that area. Though the immediate decline in the most 
sensitive economic indicators is as predicted, the offsetting economic 
activities which occur at some time subsequent to the closures often 
compensate for the demise of the installation. It may be postulated 
that, if the remainder of the local economy does not expand soon after 
military spending is reduced, the economic effect of the reduction of 
military spending will be severe just as predicted by studies of the 
impact of extant installations. The usual situation, however, is that 
the remainder of the local economy does expand. 

It is unreasonable to argue that all of the changes encountered 
by the various sectors of the local economies were the results of the 


322 



ACDA/E-156 


advent or curtailment of DOD activity. How any sector would have pro¬ 
gressed in the absence of military activity cannot be determined, but 
it should be noted that the military activity occurred in the midst of 
economic circumstances which might have played upon the local economy 
independently of the change in the level of military activity. 

The system of announcement of closure and the pattern of action 
immediately after the announcement seem to play an important role in 
the community*s ability to survive the loss of a heretofore important 
economic element. ,The announcement and the actual closure of an instal¬ 
lation should be done quickly and with considerable publicity to assure 
the positive psychological reaction necessary to inspire cohesive work 
by the community. Swift action to effect closure coupled with 
community planning can be the most important insurance of maximum 
recovery of the community. 

Without exception the most severely impacted areas are those which 
are somewhat isolated and which are dependent on a restricted economic 
base. Such communities experience a more rapid reaction to the 
addition of an installation and suffer most seriously when the instal¬ 
lation is removed as the military is often the primary source of 
economic diversification. Only when the defense facility represents 
a significantly large portion of the area f s economy does there appear 
to be an important impact on the rate of growth in the community. 

It should also be noted that the conclusions of the base closure 
studies have been conditioned by the rapidly growing national economy 
in a full employment situation. If this robust pattern of economic 
activity were not present, any detrimental effects which have been 
predicted or observed would most surely have been compounded. 

In any case, the stability and equilibrium achieved by a community 
after the closure of an installation may contrast with its previous 
level of well-being. Much effort, planning, and perhaps some luck are 
required for a city to achieve more than the potential it possessed 
before the installation was established. 

VI.6 POLICY RECOMMENDATIONS 

1. In general, a lead time of approximately one year between 
announcement and actual base closure should be adopted by DOD. Maxi¬ 
mum effort should be devoted by DOD to a rapid release of personal 
property, land and structures to facilitate their conversion to 
productive use. 


323 


ACDA/E-156 


2. To the extent possible the announcement should contain a time 
schedule of the closure. This would be of considerable assistance to 
local groups in developing their offset plans. Deviations from the 
schedule should be kept to a minimum so not to create uncertainty and 
to provide an excuse for local inaction. 

3. A special group should be established in the General Services 
Administration which would be charged with: a) rapid determination of 
other possible Federal uses after a base closure announcement, b) ex¬ 
pediting the transfer of Federal assets to state and local governments, 
and c) establishing a clear deed to the property so that disposal to 
private industry is made possible. 

4. The DOD Homeowners Assistance Program should be implemented 
with adequate funding which would encourage the transfer of DOD 
civilian employees and lessen the often serious immediate impact on the 
local housing market. 

3. A data system should be established for military installations 
by the DOD, so that analysis of the impact of military activity at the 
community level, is facilitated. These data, which should be readily 
available to the community, should include: a) the dollar amount of 
local procurement by type of good or service purchased, the geographic 
location of the supplier, and similar data on the purchases made out¬ 
side regular military procedures—such as those of the base PX and 
commissary; b) wages paid both military and civilian personnel, as well 
as information regarding the spending of these groups in the community 
and at the military installation; c) information regarding the number 
of jobs held by military personnel and their dependents in the local 
community and on the base. 

Such information would be essential for planning and the development of 
an adequate local offset program. 


324 


ACDA/E-156 


THE ADJUSTMENT OF DOD CIVILIAN AND MILITARY PERSONNEL 


Darwin W. Daicoff 


VII.1 INTRODUCTION 

A termination of the Vietnam conflict will have a significant 
effect on DOD civilian and military personnel. In addition some agree¬ 
ment on arms limitation could have similar results. Two of the likely 
results of the end of the Vietnam hostilities and/or the establishment 
of such an agreement are: 1) the separation of a large number of 
military personnel currently under arms, and 2) the release or relo¬ 
cation of a significant number of DOD civilian employees. 

Arms limitation possibilities are quite varied; their economic 
consequences will depend on 1) the type, 2) the extent, and 3) the 
scheduled time period of the limitation. If the agreement results in 
widespread and rapid reduction of major armament systems, the impact 
on the economy could be significant. 

Conversely, if the policy changes are conservative or if the 
phase-out time is long, the economic impact could be offset by exist¬ 
ing programs. 

Previous manpower studies have indicated deficiencies which 
impede the efficient and effective utilization of manpower no longer 
needed by DOD.* Among the most important are the existence of some 


Among the most important of these studies are Atlantic Research 
Corporation, An Analysis of Post-World War II Manpower Research, Policy 
and Program Experience Applicable to Current Manpower Planning for 

Peacetime Conversion of Military Manpower to Civilian Occupations 

(Alexandria, Virginia: Georgetown Research Project, 1968); Alan E. 
Fechter and Bette S. Mahoney, The Economics of Military Retirement , 
Institute for Defense Analysis, Program Analysis Division (Arlington: 
Institute for Defense Analysis, 1967); Sidney A. Fine, "A Reexamina¬ 
tion of Transferability of Skills—Part I," Monthly Labor Review , 

Vol. 80, No. 7 (July, 1937), pp. 803-810; “For Vietnam Veterans, New 
Skills and Better Jobs,” Nation ? s Business , Vol. 56, No. 10 (October, 
1968), pp. 84-88; Morris Janowitz (ed.), The New Military: Changing 
Patterns of Organization (New York: Russell Sage Foundation, 1964); 


325 











ACDA/E-156 


impediments to geographic mobility and the inadequacy of the military 
transfer system. The economic problems resulting from the separation 
of large numbers of DOD civilian and military personnel could be some¬ 
what mitigated by the adoption or expansion of various manpower 
policies. Of particular importance are those policies designed to 
increase the geographic mobility of labor and expand opportunities for 
vocational training. In view of the absence of perfect mobility of 
personnel and the relative non-transferability of many military skills, 
the need for public policy becomes evident. In the past, significant 
numbers of DOD civilian and military personnel have been unable to take 
advantage of job availabilities in different geographic locations.^ 
Furthermore, it is evident that many retirees and separatees from 
military service are not technically qualified to fill many civilian 
job openings. These problems must be attacked in order to facilitate 
the transfer of former DOD personnel to non-military tasks in society. 


^(Cont*) Charles B. Nam, "Impact of the *G. I. Bills * 1 2 on the 
Educational Level of the Male Population," Social Forces , Vol. 43, No. 

1 (October, 1964), pp. 26-32; Ronald R. Olsen, "Phase III, DOD Manpower 
Impact and Adjustment," Civilian Manpower and Community Impact Analysis: 
Changes in Status of Military Installations , U.S. Arms Control and Dis¬ 
armament Agency, ACDA/E-90, April, 1969; Robert Brooks Richardson, "An 
Examination of the Transferability of Certain Military Skills and Ex¬ 
perience to Civilian Occupations" (unpublished Ph. D. dissertation, 
Department of Economics, Cornell University, 1967); Laure M. Sharp and 
Albert D. Bidennan, The Employment of Retired Military Personnel (Wash¬ 
ington: Bureau of Social Science Research, 1966); Leslie Fishman, Jay 
Allen, Byron Hunger and Curt Eaton, Reemployment Experiences of Defense 
Workers: A Statistical Analysis of the Boeing, Martin, and Republic 

Layoffs , Prepared for the U.S. Arms Control and Disarmament Agency 
(Washington: Government Printing Office, ACDA/E-113, 1968); U. S. 
Department of Labor, Transferring Military Experience to Civilian Jobs: 

A Study of Selected Air Force Veterans , Manpower/Automation Research, 
Monograph No. 8 (Washington: Government Printing Office, 1968); 

Cabinet Coordinating Committee on Economic Planning for the End of 
Vietnam Hostilities, "Report to the President," Economic Report of the 
President Transmitted to the Congress January, 1969 (Washington: Govern¬ 
ment Printing Office, 1969), pp. 187-211; Paul A, Weinstein and Eugene 
L. Jurkowitz, "The Military as a Trainer: A Study of Problems in 
Measuring Crossover," Proceedings of the 2Qth Annual Winter Meeting , 
Industrial Relations Research Association, 1967 , pp. 277-287; Harold 
Wool, ^Military and Civilian Occupational Structures," Monthly Labor 
Review, Vol. 89, No. 1 (January, 1966), pp. 29-33. 

2 

Atlantic Research, pp. 1-13. 


326 



















ACDA/E-156 


VII.2 CIVILIAN 

Since 1965 civilian employees of the DOD have represented two- 
fifths of the total Federal civilian workforce and more than 1.7 
percent of total U. S. employment.^ Thus, any sharp change in the 
number of lederal defense personnel will have observable consequences 
upon lederal employment levels and on the civilian labor market. 

During the 1965 escalation of the Vietnam conflict, DOD civilian employ¬ 
ment increased by about 150,000. It would be safe to estimate that the 
end of the Vietnam hostilities could redice DOD civilian employment by 
not more than 200,000. Any employment reduction resulting from an 
agreement on arms limitation would be in addition to this number of 
displaced workers. 

A recent study for the U. S. Arms Control and Disarmament Agency 
highlights the effects of the curtailment of military activities on 
the civilian labor force.The study focused on the impact on more 
than 80,000 DOD civilian personnel whose jobs were to be eliminated 
or transferred as a result of curtailment actions announced by the 
DOD in November 1964. 

The curtailment actions forced the DOD civilian employees of 
the affected installations to adjust their employment status in some 
manner and resulted in a much greater proportion of the employees 
choosing to end their career with the Federal government than was 
usually the case. Furthermore, closure accelerated the normal rate of 
retirement by two to five times. Though DOD guaranteed all displaced 
worker3 equivalent positions at some location, those who continued 
their careers as Federal government employees often had to take 
different types of government jobs if they were not willing to move 
to a new location. Some few accepted lower grade positions within 
the DOD and many who continued to work for the Federal government 
found it necessary to relocate. 

The adjustments required of civilian employees took place rather 
rapidly. DOD civilian employees adjusted their employment status at a 


o 

Calculated from data in U.S. Bureau of the Census, Statistical 
Abstract of the United States: 1969 (Washington: Government Printing 
Office, 1969), Tables 307 and 570, pp. 211 and 396. 

4 

Ronald R. Olsen, op. cit . 


327 







ACDA/E-156 


pace much ahead of the actual phase-out or closure of the DOD instal¬ 
lations. This suggests that while some had an attachment to the local 
community, nearly all career employees preferred some assurance of theii 
job future. More precisely, the employees did not like the uncertainty 
of continuing employment in a position which might be terminated in the 
near future. The dominating factor which determined the adjustment by 
the employee was the relative attractiveness of alternative employment 
opportunities whether they existed in the local area or not. Thus, 
strong economic and social ties did not seem to impede mobility. 

DOD manpower and assistance programs eased the process of adjust¬ 
ment. The assistance program included the following operational ele¬ 
ments: 1) the establishment of the Automated Priority Placement 

System, 2) the payment of the moving or relocation costs associated 
with the acceptance of a new DOD position, 3) an income protection 
guarantee which assured employees that their existing rate of pay 
would be maintained for a two-year period if they remained DOD em¬ 
ployees, 4) the provision of retraining services in cases where 
warranted, and 5) the provision of severance pay for those workers who 
resigned from their Federal jobs. Factual information on employment 
opportunities within the DOD which permitted the matching of geograph¬ 
ical and occupational preferences was provided to each of the workers. 
Despite the fact that the system did not account for a majority of the 
placements of workers in other Federal jobs, it did play an important 
role and increased the number of options open to the workers. The 
provisions for retraining services widened the workers* range of 
employment opportunities, but these services where not used to any 
great extent, indicating some degree of transferability of existing 
skills between Federal employment and private markets. 

Between November 1964 and July 1967, 48,484 DOD civilian 
personnel were affected by the closure of DOD installations. (See 
Table 1.) Of the total affected, 32,418 were placed in other Federal 
government jobs and 16,066 were released from Federal employment. 
Approximately one-third of the employees chose to accept private em¬ 
ployment opportunities rather than to continue their Federal careers. 
This high rate of separation occurred despite the considerable effort 
expended in offering alternative Federal employment. One of the 
important factors contributing to this high rate of separation was the 


This rate of separation was markedly higher than the normal 
rate of 5.07 percent experienced by all other departments of the 
Federal government between 1962 and 1966. See Ronald R. Olsen. The 
most recent Federal turnover rate is somewhat higher, but is still 
well below the one-third rate for private industry. 


328 



ACDA/E-156 


TABLE 1 


THE EMPLOYMENT STATUS OF DOD CIVILIAN PERSONNEL 
AFFECTED BY THE CLOSURE OF 65 DOD INSTALLATIONS, 

NOVEMBER 196A TO JULY 1967 


Number 

of 

Personnel 


Percent of 
Total 
Personnel 


Personnel 

48,484 

100.00 

Placements 

32,418 

66.86 

Transferred with Positions 

7,310 

15.07 

Other DOD 

20,871 

43.05 

Other Federal 

2,025 

4.18 

Other 

2,213 

4.56 

Separations 

16,066 

33.14 

Resignations 

4,227 

8.72 

Declinations of Job Offers 

4,627 

9.54 

Retirements 

6,535 

13.49 

Other 

677 

1.39 


Source: “Reports of Civilian Personnel, 1964-1967, rs Office of the 
Assistant Secretary of Defense (Manpower), Department of 
Defense, Washington, D.C., undated, processed. 


329 



ACDA/E-156 


expanding economy. It provided many job opportunities in the local 
community. This eliminated the necessity of moving from the local 
area and resulted in many individuals choosing to terminate their 
Federal careers and to remain in the same location. The results might 
have been quite different had local job opportunities been less 
abundant. 

This experience also suggests certain general conclusions regard¬ 
ing the geographic mobility of different groups of workers. Female 
workers who are secondary wage earners, older workers near retirement 
age, and younger workers less committed to continued Federal employ¬ 
ment are less likely to move to accommodate new employment than are 
older, more skilled, primary wage earners. Given an acceptable alter¬ 
native, these latter workers will be willing to move appreciable 
distances in order to maintain their career status with the Federal 
government. The "younger** workers most often choose new employment 
in the local community rather than moving to alternative DOD or other 
Federal employment in other localities. 

A duplication of such favorable circumstances might not accompany 
the termination of the Vietnam conflict and/or an agreement on arms 
limitation. One should note that during the 1964-1967 period the DOD 
was increasing the number of its employees due to the expansion of 
activities associated with Vietnam. The Federal jobs that were offered 
to the affected DOD civilian workers thus came from 1) expanded DOD 
civilian employment because of Vietnam, and 2) normal replacement of 
approximately five percent of Federal civilian employees per year. 

The end of Vietnam hostilities or an arms limitation agreement will 
most likely be quite different. First, DOD employment will be falling, 
and while other Federal employment may be increasing, such increases 
will not necessarily match the DOD reduction as there is a poor match 
between DOD occupations and those of other Federal agencies. Second, 
the rate of reduction of DOD personnel after Vietnam is 15kely to be 
much more rapid than the very slow rates characteristic of closures of 
some of the major installations following the 1964 announcement. If, 
in fact, only a limited number of alternative Federal employment 
opportunities will become available, there will be an even greater 
need for maintaining a rapidly expanding private economy. 

In light of these conditions, particularly the reduction in the 
overall size of the DOD as required by budget cuts, there has been a 
change in policy. While civilian personnel will continue to receive 
significant aid in adjusting to their change in status, the DOD no 
longer guarantees each affected person another job offer. Even though 
the guarantee was ended, the remaining assistance is still significant 


330 


v 




ACDA/E-156 


and includes: priority rights to vacancies in other Defense activities, 
priority for reemployment, transportation and travel expenses, infor¬ 
mation regarding civilian jobs and retraining programs. 


VII.3 MILITARY 

The analysis of the adjustment of DOC military personnel to the 
end of the Vietnam conflict or an arms limitation agreement is consi¬ 
derably more complex than that of DQD civilian personnel. For military 
personnel both geographic mobility and skill transferability require 
attention. The discussion which follows is phrased in terms of an end 
of the Vietnam conflict. The additional consideration of an agreement 
on arms limitations would involve greater magnitudes but generally 
equivalent problems. 

Before the escalation of the Vietnamese conflict in 1965, there 
were 2.7 million members of the armed forces; three years later the 
number had increased to 3.5 million. With the end of Vietnam hos¬ 
tilities it is generally argued that the decrease in the size of the 
armed forces will be approximately 800,000.^ Coupled with the normal 
retirement rate of approximately 60,000-65,000 men per year, this 
could create pressure upon the absorptive capacity of the civilian 
labor market. 

The scope of the DOD military manpower adjustment problem will 
be significantly influenced by the timing of the demobilization and 
the resultant pattern of entry into the labor market on the part of 
ex-servicemen. That is, of some 800,000 men potentially entering the 
civilian labor market, one-fourth to one-third are expected to seek 
further education or training. ; While some of these students will 
seek part time jobs, considerably less than the 800,000 will seek full 
time employment after their discharge. If one employs the generally 
accepted demobilization scenario,^ it may be assumed that the reduc¬ 
tion in the size of the armed forces will be accomplished over an 18 
month to two-year period. The phase-out of military personnel over 


£ 

Committee for Economic Development, The National Economy and the 
Vietnam War (New York: The Committee, April, 1968), p. 53. 

7 

Ibid. More recent estimates place the fraction at one-quarter. 

8 

Cabinet Coordinating Committee, pp. 191-193. 


331 






ACDA/E-156 


that period and the more gradual entry into the labor market of the 
portion who will seek education or training will work to reduce the 
overall economic impact of the returning servicemen to relatively 
modest proportions. 

Even though the macroeconomic problems of military manpower 
adjustment may be fairly small, there may be more serious structural 
difficulties. A major problem could arise in connection with the 
adequacy of training which prepares the military dischargee and 
retiree to assume a constructive role in a civilian economy. Beyond 
the problems of skill transferability, there could be a problem of 
placing separatees in a location where there are job availabilities. 

The portion of the ex-servicemen who will be seeking civilian employ¬ 
ment soon after their separation from the military will consist 
largely of unskilled men between 20 and 24 years of age. The unemploy¬ 
ment rate for this group in the civilian economy is currently about one 
percent higher than the average unemployment rate for the entire labor 
force. Therefore, the termination of the Vietnam conflict would shift 
the composition of the labor force and more than proportionally add to 
the unemployment problem of young unskilled males. 

VII.3.1 Retirees 


With the end of Vietnam hostilities, the rate of retirement from 
military service may be anticipated to increase. Thus the particular 
characteristics of these retirees merit consideration to help under¬ 
stand their influence upon the adjustment process. Military retirement 
programs are such that career personnel have about one-half of their 
productive lives at their disposal when they retire—the average age 
at retirement for non-disability retirees is about 45 years. Thus, a 
second career for retirees is not simply a possibility, but a reality. 

A recent survey of military retirees has shown that they are 
somewhat immobile and geographically concentrated.^ Large portions 
of the retirees choose California, Florida, and Texas as permanent 
places of retirement; the Washington, D.C. metropolitan area is next 
in order of preference. The rationale for the concentration and a 
subsequent lack of mobility appears to be the strong tendency to 
remain in the area of present or previous residence where the- retiree 
feels that chances for civilian employment, particularly Federal 
related employment, are relatively good, and where the fringe benefits 
of retirees are available. 


9 


Laure M. Sharp and Albert D. Biderman, 


p. 58. 


332 










ACDA/E-156 


Post-service planning by retirees prior to retirement seemed 
to be positively related to the retiree's success in obtaining employ¬ 
ment six to eight months after retirement. One-half of those entering 
new positions Immediately after separation were those who had planned 
for employment at least six months prior to separation. The primary 
difference between the planners and the non-planners according to 
Sharp and Biderman occurred six months after retirement when non¬ 
planners were usually job-seekers.-^ Richardson argues that officers, 
in contrast to enlisted men, were more likely to have made arrangements 
for employment prior to separation.Furthermore Sharp and Biderman 
indicate that a large majority of those employed after retirement and 
separation did not utilize the assistance of an employment service. 

VII.3.2 Separatees 

The end of the Vietnam conflict will result in an increase in the 
number of separations from active duty for a large number of both 
officers and enlisted men. Presumably early steps in the demobiliza¬ 
tion will involve the deactivation of reserve units which were acti¬ 
vated at the time of the. 1965 buildup. Since the personnel in these 
units were generally employed when they were called up, it can be 
anticipated that these personnel will generally have little or no 
special adjustment problems .^ To a lesser but still substantial ex¬ 
tent, draftees were also engaged in civilian pursuits—they were 
either at work or in school when they were drafted. Thus, like the 
reservist they should experience less difficulty than terminated career 
military personnel. The serviceman who was unemployed when he was 
inducted may be quite similar to the long term enlistee in that there 
may be little for him to return to. Of course the draft-induced 
enlistee is more similar to the draftee than to the true enlistee. 

The adjustment problems will thus be particularly difficult for long 
term enlistees who will be separated at the end of the hostilities. 
However this group is more likely to have a military skill which may 
be marketable. 

Vocational and educational training seem to be the major deter¬ 
minants of the ease of transition to the civilian economy for separa¬ 
tees. It has been shown that the number of college trained individuals 
was significantly larger due to the financial aid provided by the World 


10 

Ibid ., p. 106. 

■^Robert Brooks Richardson, p. 126. 

12 

Paul A. Weinstein and Eugene L. Jurkowitz, p. 14. 


333 






ACDA/E-156 


War II and Korean G. I. Bills. 13 Nam claims, however, that the most 
important effect of the G, I. Bills has been on the number of persons 
who took specialized courses, i.e., trade and commercial training. 
Consequently, an increased number of individuals developed new skills 
or improved educational abilities due to the availability of govern¬ 
ment funds. The length of the training provided by the G. I. Bills 
has been shown to be a considerable influence on the long-run usefulness 
of the training. 1 ^ It was found that 67.3 percent of the G. I.'s with 
less than six months of training felt that the training received was of 
no significant value in their civilian job performance, while only 11.3 
percent of those who were trained for 30 months or more reported that 
the training was of little or no value.There is little to indicate 
that a six month training program would be of any more value to Vietnam 
veterans than similar programs were for World War II and Korean 
veterans. In lieu of the six month program, an alternative would be 
to instigate a thirty-plus month G. I. Bill for Vietnam veterans. If 
the previous experience is a valid indication, the problem of adjustment 
for these individuals would then be largely contained within tolerable 
limits. A thirty month G. I. vocational training program with adequate 
benefits would also have the advantage of lengthening the time between 
the end of hostilities and entrance into the labor market for these 
individuals. This would further reduce the immediate pressure on the 
labor market. 

One may ask if it is not possible that in the normal course of 
military training the serviceman does not develop sufficient skills so 
that his employability is automatically assured after his separation. 
Unfortunately this is not the case. Wool has shown that occupations 
in the military differ drastically from that of corresponding occupa¬ 
tions in the civilian sector. Eighty percent of the military jobs 
held by enlisted men correspond to ten percent held by male civilian 
workers. Civilian occupations which account for 43 percent of the 
male civilian labor force account for only 7.6 percent of military 
enlisted positions. On the basis of these data Wool argues that a 


13 

Charles B. Narn, pp. 28-30. 

14 

U. S. Congress, 84th Congress, 2nd Session, Readjustment 
Benefits: General Survey and Appraisal, A Report on Veterans” Benefits 

in the United States by The Presidents Commission on Veterans 1 

Pensions , Staff Report No. IX, Part A, House Committee Print No. 289, 
September 11, 1956 (Washington: Government Printing Office, 1956), 
pp. 87-89. 

i5 Ibid. 


334 









ACDA/E-156 


great degree of slippage would be inevitable., ^ One can safely claim 
that the military does impart valuable skills on its subjects. The lack 
of skill transferability is not a problem solely because of the lack of 
vocational training within the military experience, for it may well be 
postulated that civilian employers do not make a sincere attempt to 
utilize the skills acquired by the serviceman. There are several 
apparent reasons for a lack of transfer to a similar civilian job: 1) 
little incentive exists because of the relatively low pay scales in 
civilian occupations where military skills are demanded, 2) employers 
do not want to hire ex-servicemen whose training is less thorough than 
civilian training would have been, and 3) the seniority system precludes 
any immediate economic gain for young separatees.1? 


VII.4 THE PENTAGON’S EFFORT 

The purpose of Project Transition, which began in late 1967, is 
to assure Vietnam veterans an opportunity to make their lives useful 
and productive after separation from the armed forces. Under the pro¬ 
gram, six months prior to discharge servicemen are offered job counsel¬ 
ing, vocational training, educational opportunities and job placement 
services. Assistance is theoretically directed toward men who have not 
acquired useful and marketable skills while in the military. Project 
Transition, a voluntary program, works best when it brings servicemen 
into private company training programs during their after-duty hours. 
While action is being taken to make Transition assistance available 
overseas, the Project is far from universal in that presently, training 
can be obtained only at domestic bases. Military personnel, particu¬ 
larly draftees, are typically returned from Vietnam only a few days 
prior to separation; this obviously precludes any participation in the 
program for them. 

If the reduction in the number of military personnel after 
Vietnam proceeds according to the generally accepted timetable, there 
will be up to two years training time available. Thus a training 
program such as Project Transition could be expanded in time and 
scope so as to ease readjustment problems. 

One DOD program which will soon be functioning warrants mention. 
The DOD is expanding the centralized referral system used to place DOD 


"^Harold Wool, p. 32. 

i7 Paul A. Weinstein and Eugene L. Jurkowitz, p. 286. 


335 




ACDA/E-156 


civilian personnel whose job status is changed to include military 
personnel. An important part of the program is that the matching of 
DOD personnel skills, etc. will be to available civilian jobs. 


VII.5 CONCLUSION 

Recent studies provide substantial information about the adjust¬ 
ment of DOD civilian workers to a loss of their positions. Given 
sufficient aggregate demand and the availability of a reasonable number 
of alternative Federal employment opportunities, it can be concluded 
that the adjustment of DOD civilian personnel to the cessation of 
hostilities in Vietnam will present only a modest problem to the U.S. 
economy. In addition, it may well be postulated that an agreement on 
arms limitation would involve a gradual reduction in DOD civilian 
personnel—gradual enough to create only a minor labor market problem. 

For two reasons the consequences of a reduction in DOD military 
personnel are likely to be more severe than those which result from 
the accompanying reduction in DOD civilian workers. First, the 
reduction in military personnel in the two years following a cessation 
of hostilities in Vietnam will probably be almost five times larger 
than the reduction in the number of civilian workers. Second, military 
personnel differ in that they are much 1sss likely to have a skill or 
work experience that makes them readily employable in the civilian 
economy. While some servicemen receive valuable training in the 
service, the skills acquired are often highly specialized or not 
sufficient to transfer to civilian jobs. 

Because of these considerations high levels of prosperity in the 
economy are necessary to ease the post-Vietnam adjustment but not 
sufficient to assure that it will be easy. Veteran's benefits have 
always aided in the transition by providing the opportunity for ex- 
servicemen to obtain skills relevant to civilian jobs. Newer programs 
such as Project Transition differ in that training occurs prior to 
separation. However, it has not yet been demonstrated either that 
this is the most desirable time to provide such training or that a six 
month training period is of adequate length to effectively aid the 
individual. 


f 


336 



ACDA/E-156 


VII.6 APPENDIX 18 

Project Transition was originated in the latter part of 1967 as 
a DOD program designed to ease the transition of military personnel to 
civilian life. The primary objective of the program has been to give 
the soon-to-be-released serviceman a marketable skill that will lead 
to gainful civilian employment. 


The impetus for the program came from President Lyndon Johnson’s 
M anpower Report in 1967. He ordered government agencies to initiate 
a full-fledged effort and sought to enlist the aid of private enter¬ 
prise to ease the transition—especially for those men who had no 
civilian skills and a low level of educational achievement. To quote 

President Johnson, We must make military service a path to productive 
careers."19 

The first pilot program was established by DOD at Fort Knox, 
Kentucky. By January 1968 programs had been established in all five 
branches of the service. Operations at all 80 major installations in 
the country were scheduled early in 1968. At that time 11,000 soon- 
to-be-released servicemen were to be participating in Project Transi¬ 
tion at 280 military bases across the country. By early 1970 the 
program had provided educational assistance and training to about 
85,000 servicemen, and counseling to about 520,000. The scope of the 
Project is also indicated by the anticipated level of effort during 
FY 1970—training of more than 50,000 men and counseling 350,000. 


The following sources provided the foundation for this survey: 
John I. Brook, "Belated Job Program for Vietnam Veterans," Reporter , 
Vol. 38, No. 8 (April 18, 1968), pp. 18-21; "Business Helps GI*s Come 
Home," Business Week , No. 2004 (January 27, 1968), pp. 148-150; Depart¬ 
ment of Defense, Counseling in Project Transition (Washington: Govern¬ 
ment Printing Office, August, 1968); "Helping the GI’s Get New Start," 
U, S. News and World Report , Vol. 64, No. 6 (February 5, 1968), pp. 
53-55; Melvin R. Laird, Defense Report, Fiscal Year 1971 Defense 
Program and Budget, A Statement Before a Joint Session of the Senate 

Armed Services and Appropriations Committees, February 20, 1970 
(Washington: Government Printing Office, 1970), pp. 96-97; Robert S. 
McNamara, "Social Inequities," Vital Speeches , Vol. 34, No. 4 (Decem¬ 
ber 1, 1967), p. 102; Office of the Assistant Secretary of Defense, 
Manpower and Reserve Affairs, The Transition Program (Washington: 
Government Printing Office, 1968); and * 5 Project Transition," Newsweek, 
Vol. 72, No. 18 (October 28, 1968), p. 90. 

19 

Manpower Report of the President Transmitted to the Congress , 
April, 1967 (Washington: Government Printing Office, 1967), p. XVII. 


337 


















ACDA/E-156 


Priority for participation in Project Transition is given to 
certain groups of servicemen. Those disabled in battle rank first, 
followed by combat servicemen with no civilian related skill, others 
with no civilian skills, those who have such a skill but require 
additional training or upgrading, and finally those who desire a 
completely new civilian skill regardless of their current training 
status. 

Project Transition is a voluntary program for servicemen with 
less than six months of service time remaining and consists of four 
parts: counseling, academic education, vocational education and job 

placement.^0 Within six months of discharge each serviceman is con¬ 
sulted about his future plans. Those who decide against re-enlisting 
may volunteer for the Project. The counseling assists the servicemen 
in determining which program will be most beneficial to them. There 
are three educational programs within the Project: 1) civilian 
related skills taught in Armed Forces’ schools, 2) classes developed 
and financed by local, state and Federal agencies, and 3) training 
courses set up by private industry. 

The success of the program depends in large measure on instal¬ 
lation commanders and Project officers at each base. This is one of 
the disadvantages of the program’s decentralization. Theoretically a 
soldier can work half time at his regular army duties and attend 
classes the remaining portion of the time. He must also be partially 
freed of his regular military responsibilities in order to participate. 
This requires the permission of his unit commander; thus the program 
depends on the flexibility associated with his military responsibility. 
The servicemen participating in Project Transition have an opportunity 
to learn or upgrade a skill either in a classroom situation or in an 
on-the-job training course associated with business. The base Project 
officers work with the state educational agencies to establish voca¬ 
tional courses under the authority provided in the Manpower Development 
and Training Act. Originally, vocational courses offered by the Project 
were in response to needs for industrial electricians, small appliance 


The Urban League provides similar services for Negro Vietnam 
veterans, including not only job guidance, but also counseling on 
housing, medical care, and other readjustment problems. In eight 
cities the League maintains a staff to devote special attention to 
veteran’s problems, and thus offers a source of help to those not 
able to take part in Project Transition. 


338 




ACDA/E-156 


repairmen, draftsmen, welders and computer technicians. Currently 
the course subjects are selected from the list of job vacancies com¬ 
piled by the U. S. Employment Service. The training emphasis has been 
on computer-era skills, but this is not always the case. One service¬ 
man requested training as a blacksmith and project officials sought out 
a local blacksmith who agreed to train him. 

Almost every one of the men who participate in the private 
business training programs is guaranteed a job at some (and often a 
number of) locations, but many prefer to find employment on their own 
in other areas of the country. 

The U. S. government has traditionally offered some kind of 
compensation or assistance to returning veterans, but Project Trans¬ 
ition is unique in several ways. First, servicemen may start counsel¬ 
ing and/or training six months before discharge, and secondly, this 
is the first time that private industry has participated in training 
servicemen for civilian jobs. 

The cooperation of government agencies and various organizations 
outside the 00D is essential to Project Transition: Federal agencies 
which work with the Project include Labor, HEW and the Post Office 
Department. Labor and HEW have trained 4500 servicemen under the 
Manpower Development and Training Program. Through the Project, Civil 
Service, offers job training for the Postal Service and will make transi¬ 
tional appointments with examination requirements waived.21 The Post 
Office Department has trained more than 30,000 for postal careers. 
Furthermore, the General Services Administration makes its needs known 
to project officials at local bases. State and local agencies have 
also assisted with training and have offered employment to ex-servicemen. 
State and local police departments are given special permission to 
recruit on military installations, and more than 1700 have been 
trained for jobs in local police forces.^2 

Defense officials are convinced that private firms will provide 
most of the required job openings. Consequently they expect the 
heaviest load in the vocational training area to be carried by private 
companies* The Fort Knox pilot program brought soon-to-be-discharged 


7 1 

This occurs in the lower five grades of government service for 
men with less than high school education. The only provision is com¬ 
pletion of secondary schooling on their own time or completion of 
courses under the GI Bill. 

22 

Melvin R. Laird, p, 97. 


339 


t 





ACDA/E-156 


soldiers together with Humble Oil and Refining Company in a "dealer- 
training" program. Fifty companies, all top Defense contractors, were 
subsequently asked to cooperate in the program, and nearly all agreed 
to establish courses or indicated active interest. 

In the beginning companies were inclined to take only the best 
of prospective trainees. It is hoped that in the future business will 
also nuike available to servicemen jobs with less demanding require¬ 
ments. Typically, spokesmen for industry argue that there is a two¬ 
fold purpose for their participation: to expand the trained workforce 
of their industry and to help solve an important national problem. 

Project officials are aware that they are not reaching many of 
the men for whom the program is especially designed. New programs, 
largely stemming from the recommendations of an interagency task 
force, have been designed to assist the veteran with his employment 
problem. Establishment of a "one stop center" in each of 20 major 
cities is to provide the man coming home with personal attention and 
counsel on all of his benefits. Another program aimed at attracting 
veterans into public service would require appropriations of $50 
million to subsidize training and provide starting salaries for those 
men willing to become teachers in deprived areas, policemen, firemen, 
hospital workers, or Federal employees in a number of social service 
programs. 

Project Transition is not without drawbacks. Within the design 
of the program, participation is limited to those with only one to 
six months remaining service time and to servicemen who can get into a 
training course. Although mobility is a marked characteristic of 
veterans, the ultimate success of the program depends on the man's 
willingness to go where job availabilities exist. Military sponsor¬ 
ship may have inherent drawbacks; for example, indifference could 
result if a prospective participant harbors hostilities toward the 
military. The DOD will not ignore its need to stimulate re-enlistment, 
despite the affirmation from Washington to "think Civilian" and to be 
"flexible" in releasing men for training. While the costs of the 
program are small, there are tight budget constraints. Lastly, it is 
difficult to identify the proper target groups. 

Still, this is the type of program that must be undertaken if 
the difficulties of the transition to the civilian economy that have 
been experienced by many ex-servicemen are to be eased. Base command 
ders must come to realize that "mission" orientation is not without 
cost, i.e., on-duty time must be made available for civilian training. 
Lastly, training opportunities must be broadened, particularly in 


340 



ACDA/E-156 


redcral agencies, and all those who wish to participate must be given 
the time off from their military duties to do so. 

President Nixon recently signed an executive order that will make 
it easier for veterans to acquire Civil Service appointments provided 
that they are willing to participate simultaneously in an educational 
or on-the—job training program. He has also shown interest in several 
proposals made by the Cabinet Committee on Vietnam Veterans which will 
ease the veterans’ adjustment to civilian life. However, at the 
present time Project Transition remains the major DOD program designed 
to facilitate the productive adjustment of military personnel who are 
no longer needed in the nation’s defense. 


VII.7 POLICY RECOMMENDATIONS 


VII.7.1 Civilian 

A manpower policy should be adopted that maximizes the job 
opportunities or protects the employment of the DOD civilian worker. 

This should involve providing him with a preference with respect to 
available public jobs along with job search allowances, retraining 
allowances, etc., as may be required for either public or private 
employment. 

VII.7.2 Military 

1) Project Transition now reaches a very small proportion of 
eligible servicemen: it should be expanded considerably. One important 
aspect of the expansion should involve a change in the procedure which 
returns a serviceman from overseas only days before his separation— 
thus excluding him from participation in Transition. 

2) While improvements have been made in the educational payments, 
they are still quite low. They could be increased both in magnitude 
and duration. 

3) More attention should be devoted to the veteran following his 
discharge from the armed services. The state employment service 
should take an enlarged role in the matching of training programs with 
job opportunities and capabilities of the individual veteran. 


341 




ACDA/E-156 


THE INDIVIDUAL AND THE DEFENSE MASS-LAYOFF 

Curtis Eaton 

with the assistance of Susan Susemihl 


The immediate problems of economic transition from war to peace 
are, in a fundamental sense, the adjustment problems which will be en¬ 
countered by individuals. It is the individual rather than the firm, 
region, or industry that is the principal unit of concern. The fact 
that certain geographic regions and certain industries will face a 
sharp reduction in the demand for the goods they produce as a result 
of an end to the Vietnamese war, for instance, is of particular inter¬ 
est in locating the individuals likely to be highly vulnerable. 

For analytical purposes three different groups of individuals have 
been isolated. First, many individuals involved directly in production 
for defense will lose their jobs as a result of contract termination or 
cancellation. Included in this group are people working on prime con¬ 
tracts or subcontracts which might be eliminated as a result of an arms 
control agreement or an end to the war in Vietnam. This chapter deals 
with the problems of transition that these individuals will face. The 
second is the group employed directly by the United States Government. 
This group consists of military personnel, people employed in the De¬ 
partment of Defense, and civilian employees of government arsenals. 
Finally, there are undoubtedly a great many individuals in supporting 
industries who will lose their jobs as an indirect result of the pre¬ 
sumed changing pattern of defense demand. The problems which certain 
of these groups might expect to encounter and the special programs de¬ 
signed to aid their transition to civilian employment are discussed in 
other chapters. 


VIII.1 CONTRACT TERMINATION OR CANCELLATION 

The contract termination or cancellation problem is not a new 
problem to defense-dependent industries. In fact, the problem of 
defense-related mass-layoffs has received a good deal of attention in 
the years since 1963. The Arms Control and Disarmament Agency (ACDA) 
has totally or partially funded four studies dealing with mass-layoffs 
in the aerospace industry. In December of 1963, the Department of 
Defense (DOD) cancelled a contract with the Boeing Company of Seattle 


342 


ACDA/E-156 


to design and produce the Dyna-Soar, a manned maneuverable spacecraft. 
As a result of this contract cancellation, some 5,000 people were dis- 
charged in the December 1963 — March 1964 period. A case study of this 
layoff was conducted by the Washington State Department of Employment 
Security. The Martin Company in Denver discharged 4,000 people in the 
first 10 months of 1964 as the major Titan missile programs were com- 
p eted. The Martin Company itself conducted a case study of the re— 
employment experiences of these defense workers. * * 3 4 in the November 
1.63 - December 1964 period. Republic Aviation of Long Island, New 
York, laid off 10,000 workers as a result of the completion of a con¬ 
tract to produce the F-105, a fighter-bomber. The New York State De¬ 
partment of Labor conducted the case study of this layoff. 3 A synthe¬ 
sis of these three layoff experiences was conducted by a group at the 
University of Colorado under the direction of Leslie Fishman.^ 

In addition to these ACDA sponsored studies, at least three other 
studies relating to defense layoffs have been conducted. Between 
August 1963 and April 1964 the Hughes Aircraft Company of Tucson, 
Arizona laid off 2,400 people as production of the Falcon, an air-to- 
air missile, was cancelled. The study of this experience was conducted 
by irevor Bain. Two additional studies have concentrated on the pro¬ 


state of Washington, Employment Security Department, The Dyna- 
Soar Contract Cancellation , U.S. Arms Control and Disarmament Agency 
Publication No. 29 (Washington: Government Printing Office, 1965). 


Wilbur H. Thompson, James W. Taylor and Leslie Fishman, Martin 
Company Employees Reemployment Experiences , U.S. Arms Control and Dis¬ 
armament Agency Publication No. 36 (Washington: Government Printing 
Office, 1966). 

3 . 

New York State Department of Labor, Post Layoff Experiences, Re¬ 
public Aviation Workers , U.S. Arms Control and Disarmament Agency Pub¬ 
lication No. 35 (Washington: Government Printing Office, 1966). 

4 - 

Leslie Fishman, Jay Allen, Byron Bunger, and Curt Eaton, Re¬ 
employment Experiences of Defense Workers: A Statistical Analysis of 
the Boeing, Martin, and Republic Layoffs , Prepared for the U.S. Arms 
Control and Disarmament Agency (Washington: Government Printing Office, 
ACDA/E-113, 1968). 

^Trevor Bain, Defense Manpower and Contract Termination (Tucson, 
Arizona: University of Arizona, College of Business and Public Adminis¬ 
tration, Division of Economic and Business Research, September, 1968). 


343 













ACDA/E-156 


blems encountered by scientists and engineers involved in defense layoffs. 
One of these studies relates to the reemployment experience of approxi¬ 
mately 1,200 engineers and scientists who were discharged from companies 
in the San Francisco Bay area during an IB-month period ending in March 
of 1965. The other deals with the transition of 5(j0 scientists and 
engineers laid off by companies in the Boston area. These six defense 
layoffs comprise the principal source of information on the transition 
experience of discharged defense workers. The general literature deal-g 
ing with the mass-layoff problem will also be called upon where useful. 

Tables land 2 present souse selected characteristics of these groups 
and the corresponding local labor markets. Table 1 presents comparative 
data on age, sex, and level of education for each of the six groups. A 
good deal of variability between groups with respect to these personal 
characteristics can be noted. The mass-layoff literature has emphasized 
the importance of these variables in the reemployment experience. It is 
generally thought that advanced age is associated with a severe transi¬ 
tion, that men fare substantially better in the post-layoff job market 
than do women, and that high levels of education ease the transition. 

On each of these criteria one would expect the Hughes layoff group to 
have a difficult reemployment experience. As a group they were relative¬ 
ly old (median age of 44.8 years), only 24.4 percent had obtained educa¬ 
tion beyond high school and over 25 percent of the group were women. The 
Republic group was also relatively old (median age of 40.8 years) and 
relatively poorly educated (21.0 percent beyond high school). At the 
other extreme were the Boston and San Francisco engineers. These groups 
were clearly highly desirable. More than four fifths of them had gone 
beyond high school; roughly three fourths had a bachelors degree. The 
Boeing and Martin groups were in an intermediate position. They were 
quite young (median age around 33 years) and a substantial proportion 
(more than 15 percent) had a bachelors degree. 


R. P. Loomba, A Study of the Reemployment and Unemployment Ex¬ 
periences of Scientists and Engineers Laid Off From 62 Aerospace and 
Electronics Firms in the San Francisco Bay Area During 1963-65 (San Jose, 

California: San Jose State College, Center for Interdisciplinary Studies, 
Manpower Research Group, February, 1967). 

/ Joseph D. Mooney, n An Analysis of Unemployment Among Professional 
Engineers and Scientists, n Industrial and Labor Relations Review , Vol. 

19, No. 4 (July, 1966), pp. 517-528, 

g 

William A. Haber, Louis Ferman and James R. Hudson, The Impact of 
Technological Change (Kalamazoo, Michigan: The W. E. UpjohrTTnstitute 
for Employment Research, September, 1963). 


344 









ACDA/E-156 


Table 2 presents information on the size, structure, and tightness 
of the local labor markets associated with these six defense layoffs. 
Again, there is wide dispersion between groups in these measures. 

Researchers in the mass-layoff field have generally failed to con¬ 
sider the impact of labor market variables on the transition. Hence, 
the selection of variables to characterize the labor market is based on 
the author*s intuition and on considerations of availability and com¬ 
parability of data. The San Francisco, Boston, and Long Island labor 
markets each had more than 1,200,000 people in the civilian labor force. 
The Seattle and Denver labor markets were roughly a third to a half this 
size and the Tucson market was, relative to the others, quite small, 
having less than 100,000 people in the civilian labor force. As this 
information would suggest, the layoffs in the three largest markets were 
relatively insignificant, less than one half of one percent of the 
civilian labor force. In Denver and Seattle the layoffs represented 
roughly one percent of the civilian labor force and in the Tucson market 
the figure was 2.5 percent. 

The Seattle labor market was flooded when the layoffs began (7.2 
percent rate of unemployment), while the Denver market was relatively 
tight with a 3.7 percent unemployment rate. Seattle, Boston, and Long 
Island employment was weighted heavily toward manufacturing; more than 
one person in five was employed in manufacturing in these areas. Tucson 
was again at the other extreme with only one person in ten employed in 
manufacturing. 

Thus, these six defense layoffs occurred in widely dissimilar 
labor market settings, and the characteristics of the affected workers 
varied a good deal from group to group. This variability indicates that 
the results of a survey of these six layoffs will be applicable to a 
wide variety of mass-layoff situations. However, no small communities 
are included in the sample. Tucson, the smallest city in the sample, 
had a population .of more than 200,000 in 1960. Lack of information 
concerning the impact of mass-layoffs in small communities represents 
a major gap in the body of knowledge about defense layoffs. In addition, 
each of these layoffs involved aerospace firms; this, too, limits the 
generality of this survey. 

VIII.2 SEVERITY OF THE TRANSITION 

The most notable feature of the mass-layoff transition is the 
general severity of the experience. Table 3 presents two measures re¬ 
lating to the transition experience of the Boeing, Martin, and Republic 
workers. Information on these three layoffs was included because of 
the comparable nature of the data. The first measure is estimated 


345 


Age, Sex, and Level of Education for Six Defense Layoff Groups 


ACDA/E-156 




0) 








cO 








3 

G 





a) 








CJ 


bO 



G 



G 

CQ 













*H 


G 

rH 

<r 

O 



G 




.d 


6C 








4-4 


•H 

G 


•H 

i 



o 



hi 

G 

0) 








G 


4-4 

G 

• 

4-> 

G 

• 

G 

3 

M 




Q 

&•$ 







-H 


G 

O 

o 

G 

Pd 

a. 

4-> 

G 

O 



hi 








• 

4-> 


•H 

H 


G 



G 

•H 

4-i 



G 

to 

On 

ON 

O 

CM 

vO 

O 

G 

cO 

• 

M 

G 


•H 

G 

• 

•H 

3 



HI 

to 

•» 







<u 

4-1 

CO 

cm 

G 

4\ 

S 

G 


4J 

G 



g 

CU 


00 

On 

r-* 

iTi 

in 

CM 

0 

CO 

• 


<U 

O' 

H 

G 


G 

G 

G 


G 

rH 

o 

rH 



rH 





3 

4-4 

4-4 

r—’i 

G 

G 

• n 

G 

H 

4-1 


a 


rH 







<u 

< 


G 

O 


H 

•H 


•H 

fi-t 

G 


u 

Hi 

as 







M 


O 

(U 

u 

• 


03 

00 

3 


G 


g 

to 

X 







G 


JC 


CM 

rH 

4-1 

3 

o 

CO 

G 

CJ 


p 


o 







3 

• • 

HI 

s 


o 

a 

PQ 

C6 


G 


• 



cO 








CO 


H 

60 

> 

G 


rH 

4-4 

CO 


r\ 



PQ 







CO 

*4 

H 

0) 

C 


u 

T5 


O 


G 











M 

(U 

O 

> 

o 


4-4 

G 

n 


G 

60 MD 










CU 


4-4 

O 

€ 

3 

G 

G 

H 

G 

X 

G 

ON 










0) 

M 


Q 

•< 

G 

o 


G 

G 

4-1 

rH 

rH 










G 

G 

3 



•H 

CJ 

3 


3 


pH 



3 








*H 

DS 

0) 


4-J 

> 


*H 

0 

G 

G 

o 

•4 


g 








00 


M 

• • 

G 

G 

"3 

0 

G 

G 


CJ 

PH 

.G 

O 








G 

CU 

G 

G 

CU 

Pi! 

C 

O 

4-> 

•H 



H 


5H rH 







0> 

CO 

a o 

S 


G 

c 

p 


G 

G 

G 

•H 

0i 

O 








c 

(U 

Hi 


G 


o 

G4 

G 

0 

U 

3 


PQ 

O 

en? 






CU 

g 

w 

00 

o 

G 

H 

3 

CO 

P 

M 

G 

H 



.G 







,G 

4-4 

04 

G 

rH 

O 

G 

w 



•H 

4-1 

rO 

4-> 

d 

u 

3 

vO 

«<r 


o 

o 

4-1 

a) 


•H 

P 


3 



pq 

Pm 

CO 

G 

G 

o 

00 








Q 


-G 

s 

4J 

o 

4-4 

G 




P 

O 

*H 


*4- 

r-» 


CO 

rH 

<r 

rH 



U) 

G 

G 

p. 

O 

O 

■H 

G 

G 


o 

Hi 

rdj 


00 

CM 


CM 

00 

rH 

4-1 

G 

G 

G 

rH 

G 


*H 

G 

3 

W 

OS 

u 

CO 

6E< 







to 

O 

4-4 


G> 

G 

G 

G 

4-1 

0) 


o 

P 

G 

o 










4-4 



P4 

s 

O 

G 

0 

G 

3 

3 

cu 

3 








4-J 

CO 

O 


4-4 



•H 

H 


O 


O 


3 








CO 

g 


CG 

O 

U 

G 

CO 

4-1 

O 

H 

G 

H 


w 








£ 

o 

G' 

rH 


o 

G 

•H 

G 

rH 

4-1 

G 

CJ 










4-1 

G 

hJ 

«H 

G 

-3 

G 

> 

•H 

9“ 

3 

CO 












0) 


l 

*H 

G 

G 

•H 

G 

0 

G 


H3 










3 

*H 

3 

W 

G 


4-4 

Q 

*H 

G 

•H 


3 










CU 


•Hi 


In 


G 


0 

Ch 

W 

• • 

H 



g 







B 

CU 

rH 

C 

rH 

”3 

O 

<*. 

•3 



G 

G 



r—T 







3 

p 

A 

Q 

G 

G 


G 

< 


3 

•H 

G 



cO 







G 

X 

3 

CJ 

d 

G 


G 


3 

G 

G 

G 



S 


CO 





to 

w 

P 

<1 

< 


G 

O 

3 

G 

G 

u 

G 




CM 

o 

r-» 

r- 

vO 

o 

to 


CU' 



rH 

*H 

N 

•H 

G 


o 




H» 

• 

• 

♦ 

• 

• 

• 


4-1 

« 

•N 

G 

G 

G 

•H 

rH 


G 

4-4 




d 

vO 

o 

MT 

r- 

CO 

o 

to 

a 


tn <d 

•H 

PQ 


rQ 

4-i 

3 

•H 

H 



O 

r>» 

o 

r>. 

00 

CO 

o 

to 

CU 

3 

a 




<d 

3 

c 

G 

3 

G 



a 


rH 




rH 

3 

s 

G 

c 


4-J 



p 

G 

P 

G 












£ 

G 

G 

*s 

G 

O 

4-i 


0 

G 

CJ 

O 



G 







4~» 

o 


60 

Ps 

3 

> 

O 

3 

t*. 

O 


P 



cn 







•H 

rH 

G 

<c 

G 

*3 

G 


G 

O' 

U 


G 











P 

*H 


G 

G 

U 

Sn 

G 

rH 

G 

G 

G 










•S 

0 

4-1 

4-1 

O 

H 

H 

4-4 


P 

<J 

G 

S 










X 

G 

U 

G 

o 



•H 

G 

0 


O 











0) 

CU 

G 

G 

X 

£ 

• «*N 

G 

G 

G 

CM 

3 

«* 



G 

G 






01 

PC. 

X 

6 


* 

00 

M 

G 

G 

kD 


G 




H 









G 

• 

G 

CM 

G 

G 

pe$ 


G 

G 



<3 

CO 






G 

+s 

* 

H 

Q 

Hi 

m 

> 

•H 


0 

G 

*H 




CU 






G 

• 

5C 

P 


G 

! 

*H 

G 

G 

O 

CO 

3 



d 








*H 

c 

G 

f-G 

■H 

r^- 

G 

3 

-G 


v-/ 

3 



cO 







G 

CO 


CO 

p 

4-1 

rH 


PQ 

4-1 

4-4 


HI 




CO 

O' 

CO 

rH 

00 

M0 

O 


0) 

•H 

G 

G 

m 





m 

CO 



3 







•H 

4-1 

o 

Q 

G 

G 



4-4 

44 

4-i 

vD 




CU 

04 

3 


CM 

o 

00 

Hi 

0) 

PQ 


O 

•rH 

• 

• • 

o 

O 

14-4 

i 

PH 



£ 

3 

CO 

<1- 

CO 

<r 

3 

cO 



"3 

H) 

a 

p 

G 



O 

co 

H 










B 

#\ 

a) 

G 


CO 

a 

G 

G 



vO 

G 










J-4 

G 

rG 

G 

• «N 



O 

60 3 

3 

ON 

G 










o 

G 

H* 




N 

G 

3 

•H 

iH 

-H 










*4-4 

0 


rH 

00 

G 

/-s 

*H 

*H 

4.1 

G 


rH 








a 


G 

-G 

4-4 

c 

M0 

G 

MD 

u 

rH 

CO 

rJ 

OC 

p 








•H 


•H 

£0 

O 

H 

CH 


vD 

< 

o 



G 

•H 








rH 



•H 


4-4 

rH 

G 

O 


CJ 

c 

G 

•H 

3 








HD 


4-1 

P 

TO 

G 


H 

rH 




H 

M 

G 








3 


O 


*H 

O 

9 \ 

G 


G 

#S 


G 

3 









P 



CU 

G 

CJ 

G 

G 

<»S 

O 


G 

G 

Q 

3 




00 




0) 


0) 

*H 



O 

G 


03 

3 


G 


U 




d 


CO 

G 

&* 


a 

rH 

Hi 

CO 

•H 

•H 

rH 

3 

U 

0 

*H 

G 

G 




•H 


0) 

*H 


o 

G 

CO 

G 

0 

44 

60 

3 

3 

G 

O 

6£ 

G 

H 




CU 


A 

4J 

9\ 

o 

0) 

G 

d 

U 

4-4 

G 

*“> 

H 

G 

O 

G 

U 

G 




o 


60 

M 

3 

G 

CO 

h4 

<1 

c 

O 

W 



G 


W 

<5 

M 




PQ 


3 

cO 

G 

*H 

JD 


















30 

£ 

cO 

o 

CO 
















** 




rH 

G 


• • 















CU 


* 

#* 

G 

cO 

G 

CO 















rH 

c 

d 

u 

H4 

H 

Jd 

W 















4-1 

o 

o 

0) 


Em 

H 

u 















4-1 

4-J 

CO 

> 

00 



Pd 















CO 

CO 

o 

G 

G 

G 

G 

3 















CU 

o 

3 

0) 

o 

cO 

M 

o 















C/0 

PQ 

H 

a 

h4 

co 

cO 

CO 













346 

















Selected Measures of the Local Labor Market for Six Defense Layoff Groups 


ACBA/E-156 



a; 

c 

<y 








N 


o 








•H 


u 







o 

to 

«H 

o 









•H 

P-4 

rH 

O 

m 

m 

CO 

rH 

n> 

4H 

> 


-H 

o 

CM 

rH 

o 

o 

3 

44 

•H 

J4 

o 

o 

o 

O 

o 

o 

cd 

o 

U 

o 

• 

0 

• 

0 

• 

« 


>> 


46 








CQ 

O 

CD 








>-4 

Hi 

►-4 








60 

o 









d 

U 

(5) 








•H 


O 









u 

u 







o 

3 

d 

o 








Hi 

$ 

PH 

O 

r- 

rH 


CM 

CO 

Hi 

u 

r 


to 

CM 

o 

lO 

rH 

MO 

eD 

to 

X 

H 

CM 

CM 

rH 

rH 

CM 

rH 


44 

o 

o 

« 

* 

« 


• 

• 


3 

rH 

46 








d 

CU 

to 









0 

hJ 








s 

w 




















d 

■sc 









•H 

n» 

60 

60 

42 

60 


60 



u 

d 

to 


00 

r>. 

00 

r-. 



3 

o 

• 

• 

• 

• 

» 

» 



H> 

a 

o 

rH 

Os 


o 

rH 



o 



00 


v£> 

VO 

rH 



to 

o 

rH 

CM 



o 

CM 



4-4 

rH 









3 

g 





rH 




« 

e 










w 









H> 







L 

d 


60 

60 

42 

60 *H 

60 

S 

<U 

0) 

CM 

O 


o 

45 

<u 

0 

•M 

• 

• 

• 

• • 

• 

d 

22 

>V 

o 

rH 

<2 


LO 

LO 

CO iO 

-3- 


Cu 





60 

61) 

42 

60 

•H 

60 



d 


-K 

LO 

Mf 

Ov 

ON 

CM 

CO 



tD 

J4 

Q) 

• 

• 

• 

• 

• 

• 



•H 

O 

O 

MS' 

00 

v£) 

mj- 

O 

LO 



rH 

46 

u 

O'. 

CO 

Ov 

Mf 

vO 

o> 



•H 

CD 

o 

mT 

04 


Mf 

Cv 

CM 


• 

> 

rd 

pH 






a 

• 

CO 

•H 




rH 



MS' 

rH 


<u 

CJ 









CO 











T3 

o 










d 

d 


4H 

* 







CD 



O 

4-i 

d 

46 

O 

"CS 

0» 44 

CO 

T3 



4H 

CM 

(O 

Mf 

oo 

vD 

CM 

3 

d 


<U 

C 

* 


* 

• 

• 

• 

O 

tD 


N 


LO 


CM 

•vO 

CO 

rH 

42 


♦H 

td 





rH 



CO 


C/3 









<u 











o 










d 

Pi 








O 


•H 

3 








•H 



o 








rH 


T> 

CO 








46 


CU 









3 











CU 


CO 

o 




60 




<u 


*H 

44 




d 


CO 

d 

pd 


rH 





•H 


0) 

•H 


o 


<1) 




<U 


42 

•U 

a 

u 

<U 

60 




o 


60 

M 

*3 

C0 


CD 




pq 


3 

d 

d 

•H 

tD 

Cu 






2d 


CD 

u 










rH 

c 

CO 

HI 




<u 



* 

CO 

to 

0) 

X 




rH 

d 

d 

H 

H 

u 

M 

<U 




Hi 

o 

o 

CU 


ptl 

3 

d 




4) 

H» 

CO 

> 

60 


60 





Ct3 

to 

o 

d 

d 

d 

•H 

<u 




<D 

o 

3 

<u 

o 

CD 

Pm 

<D 




60 

PQ 

H 

Q 

rJ 

CO 

*K 

CO 


347 




ACBA/E-156 


TABLE 2 

Sources and Notes 


^ew York State Department of Labor, Division of Employment, Job 
Relationships Between Defense and Non-Defense Occupations: A Study 
of Aircraft Manufacturing Occupations , Prepared for the U.S. Arms 
Control and Disarmament Agency (New York: New York State Department 
of Labor* Division of Employment, no date), p. 2. 

^Joseph D. Mooney, "An Analysis of Unemployment Among Professional En¬ 
gineers and Scientists," Industrial and Labor Relations Review , Vol. 19, 
No. 4 (July, 1966), p. 518. 

Trevor Bain, Defense Manpower and Contract Termination (Tucson, 

Arizona: University of Arizona, College of Business and Public Ad¬ 
ministration, Division of Economic and Business Research, September, 
1968), p. 7. 

^Wilbur H. Thompson, James W. Taylor and Leslie Fishman, Martin 
Company Employees Reemployment Experiences « U.S. Arms Control and 
Disarmament Agency*Publication No. 36 (Washington: Government 
Printing Office, 1966), p. 1-1. 

6 

U.S. Department of Labor, The Operation of Severance Pay Plans and 
Their Implications for Labor Mobility « Bureau of Labor Statistics 9 
Bulletin No. 1462 (Washington: Government Printing Office, January, 
1966), p. 2. 

^Walter Langway, "The Results of the Long Island Defense Layoff Study 
with Specific Reference to Engineers, and Scientists," Stabilization 
of Engineering and Scientific Employment In Industry (San Jose, 
California: San Jose State College, Center for Interdisciplinary 
Studies, Manpower Research Group, November 19, 1966), p. 6. 

^From the series on "Work Force Unemployment and Employment in 150 
Major Labor Market Areas" which appears bimonthly in The Labor Market 
and Employment Security . U.S. Department of Labor, Manpower Admini¬ 
stration, Bureau of Employment Security. 

^Data for July, 1963, supplied by the Arizona Employment Security De¬ 
partment, Tucson Office. 

x From Labor Market Review . December, 1963, New York State Department of 
Labor Division of Employment, Research and Statistics Office, pp. 3 and 
15. Figures for New York City and Nassau and Suffolk Counties have 
been combined. 


348 



















ACDA/E-I56 


duration of unemployment in the first year following layoff. The period 
varied from a third to two-fifths of that first year. The second 
measure is an estimate of earned income in the first post-layoff year 
as a percent of income which would have been earned had the layoff not 
occurred. Thus, this measure takes into account the fact that many 
individuals who managed to obtain jobs did so only at a considerable 
reduction in salary. 


TABLE 3 

Measures of the Reemployment Experience of the 
Boeing, Martin, and Republic Workers 



Estimated Duration of 
Unemployment 52 Weeks 
After the Layoff 

Estimated Earned Income 

In the First 52 Weeks As 

A Percent of Expected Income 

Boeing 

19.1 weeks 

52.5% 

Martin 

18.4 

54.6 

Republic 

23.4 

47.8 

SOURCE: 

Leslie Fishman, et al. , Reemployment Experiences of Defense 


Workers: A Statistical Analysis 

of the Boeing, Martin, and 


Republic Layoffs? Prepared for the U.S. Arms Control and Dis¬ 
armament Agency, ACDA/E-113 (Washington: Government Printing 
Office, 1968), pp. 101 and 104. 


Ex-Martin Company employees had the shortest period of post-layoff 
unemployment, yet even they earned on the average only a little more 
than half (54.6%) the income they would have had, had they not been dis¬ 
charged. The "average” worker in this group was unemployed for 18 weeks 
in the first year following layoff. The average worker in the Republic 
group earned less than half (47.8%) the income in the first year follow¬ 
ing layoff that he would have, had he been able to remain at Republic, 
and he was unemployed for 23 weeks in that first year. Earned income 
as a percent of expected income was 52.5 percent for the Boeing group. 
Fully comparable measures of the transition experience are not available 
for the other three groups. However, it appears that the Hughes layoff 
group had an even more severe reemployment experience than the Republic 
group. For instance, 19.2 percent of the Hughes workers were unemployed 


349 










ACDA/E-156 


for more than a year between layoff and survey; only estimated 13.1 
percent of the Republic workers were that unfortunate. A similar 
comparison indicates that the San Francisco engineers had a slightly 
less severe transition than the Martin group; 22.0 percent of the San 
Francisco engineers encountered unemployment lasting at least 25 weeks 
while 30.1 jgrcent of the ex-Martin Company workers encountered similar 
difficulty. ^ Based on these considerations one could order these five 
layoffs in decreasing order of severity: Hughes, Republic, Boeing, 
Martin, and San Francisco engineers. The Boston engineers were un¬ 
doubtedly near the bottom of this list. 

These findings suggest that from the point of view of the indi¬ 
vidual the mass-layoff transition can be quite severe. The observed 
differences between groups in their reemployment histories also 
suggest that it might be fruitful to attempt to determine what 
factors are associated with a relatively harsh reemployment experience. 
This identification of the individuals or groups who are most likely 
to be severely affected by the transition would seem to be the ration¬ 
al starting point for manpower planning in an arms control or post- 
Vietnam environment. 


VIII.3 THE IDENTIFICATION OF VULNERABLE INDIVIDUALS AND GROUPS 

The traditional approach to the identification problem has been 
to attempt to explain differences between individuals in the trans¬ 
ition experience by reference, to personal or job-related character¬ 
istics. hi Haber, Ferman, and Hudson in their summary of the literature 
on technological change capsulized their findings with respect to the 
factors in the reemployment of displaced workers in the following 
manner: 


Of all the status characteristics, age appears to have the 
greatest effect on reemployment opportunities. Many of 
the studies reported that the older workers have a more 


9 

Leslie Fishman, et ai. , p. 101;and Trevor Bain, p.20. 

10 

Leslie Fishman, ibid. ; and R. P. Loomba, p. 50. 
"^William A. Haber, et al. , Chapter II. 


350 






ACDA/E-156 


difficult time than the younger workers in finding new jobs, 

•.. Education has assumed a prominent place in reemploy¬ 
ment opportunities; the less educated are less likely than 
others to find new jobs.,. The skill level of the job 
seekers also influences their reemployment possibilities. 

The importance of this factor is indisputable but there 
are some qualifications to the statement that the skilled 
workers always have an advantage in finding jobs. ... The 
sex and race of the displaced workers also affect reemploy¬ 
ment, but these factors are less important than age, education 
and skill level. 

Similar conclusions with variation in emphasis were reached con¬ 
cerning the six defense layoffs. For instance, Fishman et al . in their 
synthesis of the Boeing, Martin, and Republic experiences emphasized 
sex as the iji^st important personal characteristic in the reemployment 
experience. ~ The study of the transition experience of the San 
Francisco engineers emphasized agj^as the most important personal 
characteristic in the transition. 

Two of the studies of defense layoffs go beyond simply pointing 
out the relationships between reemployment and personal characteris¬ 
tics. The Fishman synthesis and the Hughes study used multiple re¬ 
gression techniques to clarify the relationship between personal char¬ 
acteristics and the reemployment experience. In his analysis of the 
Hughes layoff, Trevor Bain used eight personal and job-related 
characteristics (occupation at Hughes, present occupation, present 
residence, method used to find present employment, sex, age, marital 
status and number of dependents under 18 years of age) to explain the 
reemployment experience, Bain used two measures of the reemployment 
experience: duration of unemployment to first job and total duration 
of unemployment from layoff to survey. He discovered that age, sex, 
present residence and occupation at Hughes were significance.05 level 
of significance) variables in the reemployment experience. For 
each of the Boeing, Martin and Republic groups regression equations 


Ibid., p.21. 

13 

Leslie Fishman, et al ,, p,226. 
“^R. P. Looraba, p.102. 

"^Trevor Bain, pp, 33 and 34. 


351 






ACDA/E-156 


between five dependent variables and nine independent variables were 
developed using a stepwise regression procedure. Age, sex, and salary 
before layoff appear to be the most impjytant determinants of the re¬ 
employment experience for these groups. 


However, the most important conclusion to emerge from these exer¬ 
cises is that these personal and job-related characteristics alone are 
incapable of explaining a large share of the variation between individuals 
in the reemployment experience. Bain’s regression equations ’’explained” 
five percent of the variance in duration of unemployment to first joljg 
and nine percent of the variation in total duration of unemployment. 
Explained variation for the Boeing, Martin, and Republic groups ranged 
from 7 to 29 percent,The results suggest that either important de¬ 
terminants of the reemployment experience have been omitted from the 
analysis or that the random element in the reemployment experience is 
important or both. 


Variables reflecting size, structure, and relative firmness of 
the local labor market are one class of omitted variables which are 
obviously relevant to the reemployment experience. Lack of knowledge 
about the relationship between these labor market variables and the 
reemployment experience is perhaps the most important gap in our know¬ 
ledge of the mass-layoff transition. A recent study of the Boeing 
layoff has attempted to include variables reflecting demand and supply 
in the local labor market. The results indicate that a reduction in the 
overall unemployment rate in Seattle of one percentage point would have 
induced an increase in the equilibrium employment rate for the layoff 
group of about five percent. 20 This is one indication of the importance 
of the labor market in the transition experience. 

^The dependent variables were labor force status (employed, un¬ 
employed) , total duration of unemployment between layoff and survey, 
total economic loss (the difference between income which would have been 
earned had the layoff not occurred and actual income), average economic 
loss (derived from total economic loss by dividing by number of weeks 
from layoff to survey), and salary change. The independent variables 
were age, sex, level of education, number of dependents, home ownership, 
status as primary or secondary source of income to the family, seniority, 
geographic mobility, and salary before layoff. 

"^Leslie Fishman, et al ., Chapter 5. 

1 o 

Trevor Bain, p. 34. 

19 

Leslie Fishman, et al ., p.89. 

20 

"Curtis Eaton, Reemployment As A Probability Process, A Case Study 
of a Mass-Layoff (Boulder, Colorado: University of Colorado, Department 
of Economics, 1969), Unpublished Doctoral Dissertation, pp. 137-138. 


352 









ACDA/E-156 


Another indication can be developed by comparing the reemployment 
experiences of the Hughes and Republic groups. The two groups of 
workers were quite similar, although in the Hughes group workers were 
a little older and were slightly better educated, and women were some¬ 
what more prominent (See Table 1). The two groups of workers were also 
en gaged in the same type of work. Based on these facts alone one could 
expect the two groups to have similar reemployment experiences. Yet, 
as indicated above, the Hughes group had a markedly more severe reemploy¬ 
ment experience. This could te in large part due to the fact that Tucson, 
where Hughes is located, is a relatively small and isolated labor market 
when compared to the New York City area labor market into which the 
Republic workers were discharged. The Hughes layoff represented 2.5 
percent of the civilian labor force in Tucson, while the Republic layoff 
represented only .3 percent of New York’s civilian labor force (see 
Table 2). 

Recently developed evidence also indicates that random factors 
play an important role in the reemployment experience. If the 
reemployment experience is studied as a probability process, one dis¬ 
covers that among individuals who are homogeneous with respect to age, 
sex, and level of education there is still a great deal of variance in 
duration of unemployment to first job. There is also considerable over¬ 
lap in the distribution of duration of unemployment to first job between 
the most ’'employable” and the least ’’employable” subgroups broken out 
by age, sex, and level of education. For example, consider two such 
groups drawn from the Boeing layoff. For the first group, average first 
duration of unemployment was only 10.4 weeks and for the second it was 
23.0 weeks. Despite this rather large difference in average first 
duration, 29 percent of the second group experienced a first duration 
less than 10.4 weeks, the average for the first group; nearly 11 percent 
of the first group experienced a first duration of more than 23.0 weeks, 
the average for the second group.^ The interpretation that the reemploy¬ 
ment process is in large part random is substantiated to some extent by 
the fact that informal sources of labor market information predominate 
in the job search efforts of laid-off workers. If random elements do 
in fact play a major role in the reemployment process, then it is im¬ 
possible to predict with any degree of accuracy which specific individuals 
will encounter severe difficulty in the mass-layoff transition. This 
evidence then suggests that one might turn to an explanation of the 

^ Ibid. , pp. 84~b6. 

22 

William A. Haber, et al. , p. 30; and Leslie Fishman, et al. , 
pp. 25-26. 


353 







ACDA/E-156 


reemployment experience of entire groups. This shifts the focus of the 
analysis away from the identification of vulnerable individuals toward 
identification of vulnerable groups of individuals. 

There are at least two sets of factors which have a definite bear¬ 
ing on the reemployment experience—personal characteristics and labor 
market variables. The usefulness of knowledge concerning the relation¬ 
ships between these two sets of variables and the reemployment process 
is limited by the fact that this knowledge has never been woven into a 
coherent, unified framework. A first attempt to synthesize this know¬ 
ledge has recently been completed.^ A brief review of that effort is 
appropriate here. The purpose of the "synthesis" is to bring together 
the two sets of factors bearing on the reemployment experience in such 
a way that the resulting information will assist one to identify, before 
layoff, the groups likely to encounter the most difficult problems in 
transition. The conceptual framework of the synthesis can be represented 
as 

RE - f (p", L, t), 

where RE is the percentage of the layoff group reemployed over time, P 
i^s a vector of personal characteristics associated with the layoff group, 

L is a vector of labor market variables and t represents time from layoff. 

Empirical content was given to this conceptual framework by re¬ 
ferring to the reemployment experience of the six defense layoff groups 
discussed above. Information on the rate of unemployment for the layoff 
group at various points in time following the layoff was not available; 
hence, a proxy for this variable was used as the dependent variable. 
Observations from the cumulative ogive of total duration of unemployment 
for each layoff group were used. Six such observations were available 
for each of the Boeing, Hughes, Martin, and Republic groups. Five ob¬ 
servations were available for the San Francisco engineers and four for 
the Boston engineers. The relationship between total duration of unem¬ 
ployment at various points in time (the proxy variable) and the rate of 
unemployment at various points in time is not immediately clear. To 
clarify the nature of the proxy variable consider one of the data points. 
At the time of survey 33.2 percen^of the Hughes group had encountered 
unemployment of 13 weeks or less. Thus, one of the data points for RE 
is 33.2 percent and the associated value of t is 13. If total duration 
of unemployment from layoff to survey for each individual was composed 


'Curtis Eaton, "Defense Layoffs, A Quantitative Synthesis" 
(Boulder, Colorado: University of Colorado, Bureau of Economic Research, 
Staff Paper, 1969). 

24 

Trevor Bain, p. 20. 


354 



ACDA/E-156 


of one stretch of unemployment immediately following layoff then the rate 
of employment 13 weeks after the layoff would have been 33.2 percent. 

In this assumed case the proxy variable is coincident with the rate of 
employment over time, the target variable. The fact that some individuals 
actually encountered more than one period of unemployment means that the 
proxy will result in an under-estimate of the employment rate in early 
periods following layoff and in an over-estimate in periods near the 
survey. 

Three different forms of the reemployment function (RE) were 
developed. The most interesting is reproduced in Table 4. "Percent of 
the layoff group with some education beyond high school" is the only 
personal characteristic variable included in the model. Two labor 
market variables are included. The ratio of manufacturing employment to 
the civilian labor force is a variable intended to reflect to a limited 
degree the structure of the local labor market. And, of course, the 
rate of unemployment in the local labor market is a reflection of the 
degree of tightness in the labor market. Measures of these two variables 
were taken at the nearest point in time prior to the layoff for which 
they were available. 

By substitution of the proper values from Table 2 and Table 3 one 
can reduce the RE function to a function of time for each layoff group. 

An application of the RE function to the Boeing and Boston groups 
follows: 

“"Boeing = .00239 (44.3) + .62734 (.235) - .01434 (7.2) - .00270 t + 

.14872 t' 5 - .17582, 

“Boston = .00239 (87.6) + .62734 (.227) - .01434 (5.0) - .00270 t + 

.14872 t' 1 - .17582 

j 

Or, 

“Boeing = -.02577 - .00270 t + .14872 t' 5 and 

“Boston = .10425 - .00270 t + .14872 t' 2 . 

These two functions are pictured in Figure 1 for the first 52 
weeks following the layoff. As the figure demonstrates, the labor mar¬ 
ket and personal characteristic variables influence only the intercept 
of the RE function. Two shortcomings of this particular formulation of 
the model are apparent from Figure 1. The intercept for the Boeing 
group is negative. Clearly this makes no sense. And for the Boston 
group the RE function eventually rises above 100 percent. 


355 



ACDA/E-156 


TABLE 4 


A Reemployment Function 


Variable 

Coefficient 

Approximate 

Significance 

Level 

Percent Beyond High School 

.00239 

.99 

Ratio of Manufacturing 

Employment to Civilian 

Labor Force 

.62734 

.95 

Unemployment Rate 

-.01434 

.60 

Time 

-.00270 

o 

00 

• 

Square Root of Time 

.14872 

.99 

Intercept 

-.17582 


Coefficient of Determination 

.967 



Standard Error of the Estimate .0637 


SOURCE: Curtis Eaton* "Defense Layoffs, A Quantitative Synthesis" 

(Boulder, Colorado: University of Colorado, Bureau of Economic 
Research, Staff Paper, 1969), p. 10. 


356 







ACDA/E-156 


FIGURE 1 

Reemployment Functions for the Boeing and 
Boston Layoff Groups 



0 5 10 15 20 25 30 35 40 45 50 52 

Weeks from Layoff 


357 











































































































































































































































ACDA/E-156 


This too makes no sense. However, the model fits the observed data 
points well as indicated by the high value of the coefficient of 
determination (.967). 

Using this model one can derive an estimate of average duration 

For example, for the Boeing 
of unemployment (DU) for weeks 

f 52 

ftfL . dt. 

Boeing 

1 

weeks, and is represented in 

unemployment by group in the 
Engineers (12.2 weeks), 2) San 
Francisco Engineers (14.4 weeks), 3) Martin (18.3 weeks), 4) Boeing 
(18.9 weeks), 5) Republic (20.9 weeks), and 6) Hughes (24,1 weeks). 
Thus, the model gives us a ranking by group of the estimated severity 
of the reemployment experience which closely approaches the survey re¬ 
sults discussed above. Many variables which are probably relevant to 
the reemployment experience have not been included due to data 
limitations. However, the model does synthesize to some extent the 
information available regarding the reemployment experience. 

One further topic under the general heading of identifiability of 
individuals who might face severe adjustment problems deserves discus¬ 
sion— -defense engineers. A great deal of attention had been paid to 
the problems which engineers and scientists engaged in defense work 
(defuse engineers) might face in the event of reduced defense spend¬ 
ing."^ The most commonly advanced hypothesis is that defense engineers 
will encounter an especially difficult transition because their skills 


of unemployment for each layoff group, 
gro^ the estimate of average duration 
one through 52 is given by 

DU (1-52) - 51 - 


For the Boeing group the value is 18.9 
Figure 1 as the cross-hatched area. 

The estimated average duration of 
first year is given below: 1) Boston 


In order to avoid the problems associated with the negative 
intercept, the lower limit of integration is one instead of zero. 

2 6 

U.S. Congress, 88th Congress, 2nd Session, Senate Committee on 
Labor and Public Welfare, Subcommittee on Employment and Manpower, 
Convertibility of Space and Defense Resources to Civilian Needs: A 
Sear ch for New Employment Potentials , Vol. 2 (Washington: Government 
Printing Office, 1964). 


358 







ACDA/E-156 


are largely unique with few civilian counterparts.^ 

Very little empirical evidence has been produced to suDstantiate 
or refute this proposition. Most studies dealing with the adjustment 
problems of defense engineers have not been comparative in nature; that 
is,the transition problems faced by defense engineers have been studied 
without reference to the transition problems faced by other groups of 
individuals involved in the mass defense layoff. This is especially true 
of the studies of Boston and San Francisco defense engineers. A recent 
analysis has attempted to look at t^g transition problems of defense 
engineers in a comparative setting/ The analysis is based on the 
reemployment experience of the Martin and Boeing layoff groups. A 
"defense engineer" was defined as anyone in the layoff group holding at 
least a bachelor T s degree in engineering, mathematics, the physical 
sciences or biology. The reemployment experience of these defense en¬ 
gineers was compared with that of another group of laid-off workers hold¬ 
ing at least a bachelor f s degree in business, the social sciences, or 
"other" fields. The selection of a "defense engineer" group and a 
"business-social scientist" group from each of the Boeing and Martin 
layoffs was involved. Groups from the same layoff were selected so 
that there were no significant differences between the "defense engineer" 
and "business-social scientist" groups with respect to age, sex, 
seniority, number of dependents, and level of education. This was done 
in order that observed differences in the reemployment experience 
between groups would not be attributable to the influence of these 
personal characteristics. The conclusions of this analysis are that: 


Seymour Melman, "Key Problems of Industrial Conversion to the 
Civilian Economy," U.S. Congress, 88th Congress, 2nd Session, Senate 
Committee on Labor and Public Welfare, Subcommittee on Employment and 
Manpower, Convertibility of Space and Defense Resources to Civilian 
Needs: A Search for New Employment Potentials, Vol. 2 (Washington: 
Government Printing Office, 1964), p. 886; and John L. Ullraan, "Problems 
of Occupational Conversion," U.S. Congress, 88th Congress, 2nd Session, 
Senate Committee on Labor and Public Welfare, Subcommittee on Employment 
and Manpower, Convertibility of Space and Defense Resources to Civilian 
Needs: A Search for New Employment Potentials, Vol. 2 (Washington: 
Government Printing Office, 1964), p. 679. 

28 

R. P. Loomba;and Joseph D. Mooney. 

2 9 

Curtis Eaton, "Engineers and Scientists: Do They Have Special 
Adjustment Problems?" (Boulder, Colorado: University of Colorado, Bureau 
of Economic Research, Staff Paper, 1969). 


359 







ACDA/E-156 


1. Engineers appear to have had a less severe 
reemployment experience than people holding 
degrees in the social sciences and business. 

This conclusion holds if one considers duration 
of unemployment, salary loss, or labor market 
status at the time of survey as measures of 
the severity of the reemployment experience. 

2. A large proportion (35 percent overall) of 
the engineers considered did transfer to non¬ 
defense work, but a larger proportion (59 
percent), of the non-engineers made the change. 

3. Those engineers who did transfer to nondefense 
work had a reemployment experience which was no 
more severe than that of the nonengineers who 
transferred to nondefense work. 

4. If one is willing to take salary as a measure 
of, or proxy for productivity, the engineers 
changing to nondefense work do not appear to 
have suffered a loss in productivity which was 
greater than that of the nonengineers who trans¬ 
ferred to nondefense work.^ 


VIII.4 ADJUSTMENT PROCESSES 

The defense mass-layoff sets in motion certain processes which 
tend to mitigate the impact of the mass-layoff on the individual and 
the community. Four of these processes are discussed in this section. 
The first and most important is the geographic mobility of labor. 


One of the most dramatic facets of the post-layoff behavior 
of the six groups of defense workers is their generally high level 
of geographic mobility. Approximately 38 percent of each of the 
Martin and San Francisco engineer layofingroups moved away from 
Denver and San Francisco, respectively.^ At the other extreme only 
slightly more than 8 percent of the Repu^ic workers left the New 
York area following the Republic layoff. However, this figure may 


30 

31 

32 


Ibid ., 
Leslie 
Leslie 


p. 11. 

Fishman, 
Fishman, 


et al . 
et al. 


p. 21; and R. P. Loomba, p. 80. 

p. 21. 


360 






ACDA/E-156 


be deceptively low; this point is dealt with below. 

Treyor Bain’s analysis of the Hughes layoff and the "Fishman 
synthesis of the Boeing, Martin, and Republic layoffs attempted to 
explain geographic mobility by reference to personal characteristics. 
The traditional conclusions with respec ; to the direction of the 
relationship between such variables as sex and level of education 
and geographic mobility were in large part confirmed. But these 
personal characteristic variables were not capable of explaining^ 
even 15 percent of the variance in mobility between individuals. 

This indicates that other omitted variables play an important role 
in the mobility process or that differences between individuals with 
respect to mobility are inexplicable or both. 

Evidence initially produced in the Fishman synthesis indicates 
that the condition of the local labor market is an important deter¬ 
minant of geographic mobility. Three different threads of evidence 
support this contention. First, as the Martin layoffs continued 
throughout 1964, the Denver labor market deteriorated. If the geo¬ 
graphic mobility of the ’’early" and "late" layoff groups is compared, 
one discovers that "Thirty-six percent of the ’early layoff’ sub¬ 
group at Martin moved from the Denver area during the fourteen months 
between their layoff and the survey. Over forty-four percent of the 
’late layoff’ subgroup at Martin moved from the Denver^rea during 
the eight months between their layoff and the survey." 

The second thread of evidence is based on a simulation of 
geographic mobility based on personal characteristics. Recall that 
only slightly more than eight percent of the Republic workers moved 
from the New York area following their layoff. The "simulation 
showed that twenty-five percent of the Republic layoff group would 
have moved after the layoff if they had been discharged in the Denver 
labor market." 35 The inference is that the depressed state and 
relatively small size of the Denver labor market (in relation to 
New York) would have induced a substantial amount of geographic 
mobility in the Republic group. 

The third thread of evidence is directly related to the second. 

33 Ibid . , p. 132;and Trevor Bain, p. 34. 

3 ~*Leslie Fishman, et al . , P« 128. 

35 Ibid., p. 124. 


361 






ACDA/E-156 


In terms of personal characteristics of the layoff group, the Republic 
and Hughes groups were quite similar (See Table 2). Both groups 
were relatively old and relatively poorly educated. The Tucson labor 
market is quite small in comparison to the New York labor market, 
and the Hughes layoff represented over two percent of the labor force 
in Tucson (See Table 2). If the hypothesis concerning the relation¬ 
ship between the labor market and geographic mobility is correct, a 
substantial proportion of the Hughes group would be expected to have 
moved from Tucson. In fact, nearly a third of the Hughes group left 
Tucson following their layoff. The evidence seems to establish the 
direction of the relationship between the labor market and geographic 
mobility. However, the evidence does not indicate the strength of 
the relationship. Further research in this area is definitely needed. 

One further point of interest with respect to mobility arises 
from the Fishman synthesis. When systematic comparisons are made 
between the persons who moved and those who did not, it appears that 
the movers had a less severe reemployment experience. This is 
especially true for those persons who did not return to their area 
of residence prior to their employment at Bering, Martin, or Republic 
and for those who were the highly educated. 

The second of the adjustment processes discussed in this 
section is industrial mobility. In order to find reemployment many 
workers accepted employment in another industry. The pattern for 
the ex-Martin Company employees seems typical. Although only a crude 
classification of industries is available for this group, even this 
classification shows a substantial degree of industrial change. Only 
50 percent of the Martin workers who found reemployment were reem¬ 
ployed in manufacturing industries. Large portions of the group were 
reemployed in transportation (11 percent), trade (10 percent),^finance 
(7 percent), service (14 percent), and government (7 percent). 

In this study the more interesting question is the ability 
and/or the willingness of defense workers to become reemployed in 
nondefense work. For the two groups of defense engineers a large 
but not overwhelming portion of the jobs found were in nondefense 
industries. Nearly 54 percent of the San Francisco engineers 
became reemployed in nondefense work and 23 percent of the Boston 


3 6 

Trevor Bain, pp. 13 and 22. 

^Leslie Fishman, et al ., pp. 128 and 129. 
38 

Wilbur H. Thompson, et al ., p. A-4. 


362 






ACDA/E-156 


39 

engineers were reemployed in nondefense work. A much larger pro¬ 
portion of the other layoff groups found nondefense reemployment. For 
instance, 72 percent of the Hugheg^and 75 percent of Martin groups' 
post-layoff jobs were nondefense. It is interesting to note that 
prior to employment at Martin, over half this group had been employed 
in defense work, in sharp contrast to the 25 percent who begjme re¬ 
employed in defense work after their discharge from Martin. 


Two ACDA-sponsored studies have engaged in intensive com¬ 
parisons of ^.e job relationships between defense and nondefense 
occupations. In both cases, the matching of defense to nondefense 
jobs was generally based on a consideration of specific skills re¬ 
quired. The California study focused on the potential transfer 
of technical and production worker^involved in the production of 
missiles to nondefense employment. This study concludes that M The 
majority of defense occupations suj^eyed have counterparts for which 
the employment outlook is 'good'." 

Joseph Mooney's analysis of the reemployment experiences of 
the Boston engineers provides some evidence on the willingness of 
defense workers to transfer to nondefense work. In response to a 
question concerning their preference for defense work as against 
"commercial" work, 72 percent of the sample indicated a definite 

preference for "commercial" work.^ In addition, 47 percent of these 
Boston engineers indicated that their history of defense work was not 


39 

40 

41 

42 

Workers . 

43 

44 

45 


R. P. Loornba, p. 93;and Joseph D. Mooney, p. 137. 

Trevor Bain, p. 24;and Wilbur H. Thompson, et al. , p. A-4. 
Wilbur H. Thompson, et al ., p. A-4. 

Ibid ., and Post Layoff Experiences, Republic Aviation 

Post Layoff Experiences, Republic Aviation Workers, p. 10. 
Ibid. , p. 15. 

Joseph D. Mooney, p. 204. 


363 










ACDA/E-156 


a hindrance in transferring to commercial work. The evidence seems 
to indicate that there is not a great deal of difficulty involved in 
transferring from defense to nondefense work. In fact, the concept 
of a "defense" worker does not appear to be very useful. 


The third adjustment process discussed here relates to the 
occupational adjustments which many individuals involved in a mass 
layoff are forced to make. Following the San Francisco layoffs 74 
percent of these defense engineers obtained jobs that involved 
considerably different kinds of work, "...approximately 15 percent 
of these individuals reported that they were doing nonengineering/ 
scientific work." ' Nearly eight percejig of the Boston engineers 
were reemployed in nonengineering work. Similar patterns of occu¬ 
pational change characterize the other defense layoffs. Only 44 per¬ 
cent of the Republic group remained in the same broad occupational 
category in their first post-layoff job, and the dominant movemen^ 
for this group appears to have been down the occupational ladder. 

For the Hughes layoff, it appears that only^O to 60 percent of the 
group maintained their occupational status. 


The fourth process of adjustment to the mass layoff deals with 
changes in the price of labor. The laid-off worker can lower his 
price in order to facilitate reemployment. Conceptually such an 
adjustment can be seen as an increase in the supply of labor at going 
wage rates or a shift to the right of the labor supply curve. The 
evidence relating to this adjustment process is substantial. For 
example, 54 percent of the Martin group experienced a salary reduc¬ 
tion, and almost 10 pejcjent of the group experienced a reduction of 
at least $75 per week." The median wage for women ip the Republic 
’ group plunged $146 per month; for men, $70 per month. J Roughly 20 


46 

47 

48 
49. 


Ibid. , p. 205. 

R. P. Loomba, p. 77. 
Joseph D. Mooney, p. 89. 


Post Layo f f Experiences, Republic Aviation Workers, pp. 26 
112, 113. --- 

50 

Trevor Bain, pp. 24-25. 

J H/ilbur H. Thompson, et al., p. V-5. 

52 

Post Layoff Experiences, Republic Aviation Worke rs, p. 11. 


364 








ACDA/E-156 


to 30 per^nt of the San Francisco engineers experienced salary re¬ 
ductions. 

A more extensive analysis of price adjustments was conducted 
by Byron Bunger using data from the Boeing layoff. He discovered 
that personal characteristic variables are not closely associated 
with change in salary from pre-to post-layoff jobs. The 11 best 
personal characteristic variables accounted for only 21 percent of 
the variance in percentage salary change. He did, however, dis¬ 
cover a marked relationship between change in salary and duration of 
unemployment. The evidence indicates that the accepted salary of 
the Boeing group declined four percent immediately and continued to 
decline at the rate of about .3 percent per week of unemployment. 

In addition, the behavior of "reservation salary" for the 
Boeing group was closely analyzed by Bunger. "Reservation salary" 
is defined as the minimum wage rate needed in order that labor 
services are not withheld. Once again, personal characteristics 
were incapable of "explaining" variations in reservation salary. 

The coefficient of determination between reservation salary expres¬ 
sed as a percentage change from p^g-layoff salary and the four "best" 
personal characteristics was .08. 

The four adjustment processes indicate the flexibility of 
these defense workers. They are quite mobile geographically; they 
have no marked attachment to the "defense industry"; they will, if 
forced to, change occupations; and they are willing to accept pay 
reductions in order to become reemployed. Further, it appears that 
the deterioration of the local labor market occasioned by the mass 
layoff reinforces these adjustment processes. For example, accepted 
salaries appear to decline with duration of unemployment, and geo¬ 
graphic mobility is stimulated by a depressed labor market. However, 
as indicated by the overall severity of the mass-layoff transition, 
the adjustment process takes time and may be quite painful to the 
individual. 


S3 

R. P. Loomba, p. 73. 

“^Leslie Fishman, et al ., p. 144. 

55 Ibid ., p. 147. 

S 

'Byron Mead Bunger, Unemployment and the Acceptable Wage: An 
Examination of Forced Layoffs in the Defense Industry , (Boulder, 
Colorado: University of Colorado, Department of Economics, 1969), 
Unpublished Doctoral Dissertation, p. 76. 


365 







ACDA/E-156 


These points all deal with adjustments made by the sellers of 
labor. One might expect the buyers of labor to make adjustments to 
the mass layoff and resultant excess supply of labor. For example, 
one might expect employers to take advantage of this occasion to 
upgrade their work force. However, very little is known about these 
adjustments and research in this area might be fruitful. 

r »' 

VIII.5 REMEDIAL MEASURES 

The evidence bearing on the problem of identification of groups 
of individuals which are particularly vulnerable to the adjustment 
problems associated with a mass layoff has been reviewed. Certain 
adjustment processes which tend to mitigate the impact of the mass 
layoff have been discussed. But the general severity of the 
experience still remains the most prominent feature of the mass- 
layoff transition. This raises the question of the kinds of measures 
which can be implemented to cushion the impact on individuals of a 
defense-related mass layoff. Two basic sets of policies can be 
pursued. One set attempts to lubricate or accelerate the ongoing 
adjustment processes. Such policies include both those designed to 
enhance the ability of the worker to move to areas of growing employ¬ 
ment opportunities and also to encourage the mobility of capital. 

One might want to bring the job to the displaced defense workers; 
unfortunately a consideration of this policy is outside the scope 
of this paper. The other set consists of policies designed to main¬ 
tain the income of the discharged worker. These income maintenance 
policies may hasten or hinder the natural adjustment processes. 

It would seem that labor market information is the most impor¬ 
tant lubricant in the labor market system. Several points regarding 
the labor market information function deserve mention. First, the 
formal or organized channel^of labor market information have general¬ 
ly been highly ineffective."' This generalization holds true for the 
defense layoffs considered here. For example, less than 8 percent 
of the Martin workers who contacted the Colorado State Employment 
Service located a job through this channel. For the Republic group, 
the corresponding success rate was 2.8 percent. 58 Similarly, 65.1 per¬ 
cent of all jobs found by the males in the Boeing group as of 1 % months 
after the layoff were through the channels of direct application (32.5 
percent), friends and relatives (22.0 percent), and advertisements (11.6 


57 

William A. Haber, et al ., p. 30. 

58 

Leslie Fishman, et al ., p. 25. 


366 





ACDA/E-156 


59 

percent). State and commercial employment agencies produced less 
than 13 percent of the jobs for this same group despite the fact 
that over three-fourths of the group made contact with one or both 
types of these agencies.^0 The San Francisco engineers found that 
contact with state and commercial employment agencies was less than 
one-third as likely to produce a job as was direct application. The 
only channels of information which were found to be less efficient 
for these engineers than the employment agencies were professional 
societies and trade or professional magazines. Perhaps the Employ¬ 
ment Security System has come to represent M un"-employment security. 
Its positive role of locating jobs may have become secondary to its 
role as vendor of unemployment compensation.^ 

The potential usefulness of good labor market information is 
demonstrated by an experience which occurred during the layoff at 
Boeing. Shortly after the initial cutbacks, the Boeing Company 
invited personnel representatives of several hundred firms from 
throughout the nation to come to Seattle and interview the ex- 
Boeing workers. These representatives were set up in a large circus 
tent raised in a parking lot. A detailed comparative analysis of the 
reemployment experience of the workers who participated in these 
interviews with the experience of those who did not indicated that 
the interview experience was closely associated with a relatively 
favorable reemployment experience. The tent interview was successful 
in locating a job for more than 20 percent of the participants.^ 

A significant corollary of this proposition relates to the relation¬ 
ship between geographic mobility and labor market information. 

Exactly 50 percent of the interviewees moved from Seattle; whereas 
less than 34 percent of the noninterviewees moved. This difference 
in mobility could not be associated with differences in personal 
characteristics between groups.64 


59 

The Dyna-Soar Contract Cancellation , p. 168. 

^ Ibid ., p. 161 and 168. 

^R. P. Loomba, p. 63. 

^Richard c. Wilcock and Walter H. Franke, Unwanted Workers: 
Permane nt Layoffs and Long-Term Unemployment (New York: The Free 
Press of Glencoe, 1963), pp. 233-234. 

^Leslie Fishman, et al . , pp. 116-121. 

64 

Ibid., p. 117. 


367 











ACDA/E-156 


The Fishman synthesis of the Boeing, Martin, and Republic 
experiences emphasized the importance of the placement function in 
the interarea information network. "When mobility is coupled with 
good job information that leads to a job-in-hand move, it^jlmproves 
the reemployment success enormously" (emphasis supplied). The 
notion that a job-in-hand is a very effective stimulant to mobility 
is substantiated by the experience of the experimental labor 
mobility projects carried out by the United States Department of 
Labor. With respect to the projects operating in fiscal year 1967, 
Audrey Freedman reports that "Employers offered specific jobs to 
slightly less than half of this eligible group, and^gver two-thirds 
of those who were offered jobs accepted and moved." 


These observations suggest that an overall upgrading and ex¬ 
pansion of the organized channels of labor market information would 
help a great deal in the mass-layoff transition. This need was also 
emphasized by the Cabinet Coordinating Committee on Economic Planning 
for the End of Vietnam Hostilities. The strong relationship between 
labor market information and geographic mobilit^gemphasizes the need 
for an effective interarea information network. In this connection, 
the placement function of the information network should be empha¬ 
sized as a stimulant to geographic mobility. In the case of the 
larger layoffs a special labor market service, perhaps patterned 
after the Boeing operation, would be most useful. 


^Ibid . , p. 224. 

66 

Audrey Freedman, "Labor Mobility Projects for the Unemploy- 
ed," Monthly Labor Review , Vol. 91, No. 6 (June, 1968), pp. 56-57. 

67 

Cabinet Coordinating Committee on Economic Planning for the 
End of Vietnam Hostilities, "Report to the President," Economic Re¬ 
port of the President Transmitted to the Congress,January, 1969 
(Washington: Government Printing Office, 1969), p. 210. 

68 

For a recent description of a Labor Department experiment 
with computerized job banks, see "Job Bank in a Computer Pays Off 
and Branches Out," Business Week , July 5, 1969, pp. 70-71. 


368 












ACDA/E-156 


In this connection it is interesting to note that the Boeing 
Company in Seattle is once again undergoing substantial reductions 
in its work force. The Company’s employment in the Seattle area 
has been declining at the rate of about 1,000 people per month for 
the past several months. Again, the company has made an effort to 
attempt to place its discharged employees. The program is focusing 
on placement of salaried employees. Central to the placement oper¬ 
ation is the sending of resumes of discharged workers to other 
interested companies. About 200 companies, most of which are outside 
Seattle, have shown some interest in the program. And the personnel 
office sees the program as being quite successful, perhaps accg^nting 
for half of the new placements of discharged salaried workers. 


It is significant that the British have also found the special 
labor market service a useful tool in the placement of displaced 
aerospace workers. In Britain in 1965 some 8,000 aircraft workers 
became '’redundant.'' As a part of its effort to assist these dis¬ 
charged workers, the Ministry of Labour established placement offices 
on site at the larger plants. Nearly 1600 of the 5000 workers who 
participated in th^ge special placement operation interviews found 
jobs through them. 

Closely related to the functioning of information networks is 
the question of advance notice. Knowledge that a permanent layoff 
or shutdown is impending can be a most significant factor in prevent¬ 
ing prolonged unemployment for workers faced with permanent layoff. 
Advance notice gives the firm and community time 1) to set up or 
review programs for severance pay, early retirement and for transfer, 
and 2) to establish a system of job placement to aid employees in 
finding similar jobs with other plants. Furthermore, advance notice 
gives the displaced worker time both 1) to seek new employment, and 
2) to choose among alternatives such as unemployment compensation, 
severance pay, early retirement, or interplant transfer. In addition, 
early notice prepares the worker for the financial possibilities of 
the future. One complaint of displaced Armour workers was that the 
short notice of the shutdown caught them with heavy financial burdens 
they would not have assumed had they known of the impending 


69 

Information provided by Lowell P. Mickelwaist, Vice President 
(Industrial and Public Relations), The Boeing Company, Seattle, 
Washington. 

70 

' Organization for Economic Cooperation and Development, Geo¬ 
graphical and Occupational Mobility of Workers in the Aircraft and 
Electronics Industry: Supplement to Final Report , (Paris: OECD, 
1966), pp. 76 and 77. 


369 






ACDA/E-156 


shutdown. A reasonable notice of shutdown would have prevented 
unnecessary or unusual expenditures; thus, the displaced worker 
could use his severance or termination pay, savings, et cecera , for 
living, moving, or retraining expenses rather than debt repayment. 

Knowledge concerning advance notice provisions in defense 
industries is limited. However, the medial length of advance notice 
for the San Francisco Engineers was less than eight days, and in the 
Boeing layoff there was no provision at all for advance notice. 

At least two authors have emphasized the need for advance notice of 
two or three months in order to prepare for a smooth transition.^ 
Leslie Fishman suggests: 

Well in advance of every mass defense- 
oriented layoff, estimates of the probable 
economic and reemployment impact should be 
made by the company involved, in cooperation 
with local and state agencies, private 
analysts, and other aerospace companies 


71 

Richard C. Wilcock and Walter H. Franke, p. 208. 

72 

R. P. Loomba, p. 40; and Robert Brandwein, ’’Mass Layoffs 
of Defense Scientists and Engineers: A case Study — Seattle, 
Washington," Stabilization of Engineering and Scientific 
Employment in Industry (San Jose, California: San Jose State 
College, Center for Interdisciplinary Studies, Manpower Research 
Group, November 19, 1966), p. 40. 

73 

Waiter E. Langway, ’’The Results of the Long Island Defense 
Layoff Study with Specific Reference to Engineers, and Scientists," 
Stabilization of Engineering and Scientific Employment In Industry 
(San Jose, California: San Jose State College, Center for Interdis¬ 
ciplinary Studies, Manpower Research Group, November 19, 1966), 
p. 60; and Leslie Fishman, "Results of the Martin Layoff Study with 
Special Reference to Engineers and Scientists," Stabilization of 
Engineering and Scientific Employment in Industry (San Jose, Cali¬ 
fornia: San Jose State College, Center for Interdisciplinary Studies, 

Manpower Research Group, November 19, 1966), p. 66. 


370 










ACDA/E-156 


along with experts from DOD other 
interested federal agencies. 

Both authors suggest early and positive action on the part of the 
government and the firm to minimize the effects of a contract can¬ 
cellation or completion. Moreover, it would seem to be a relatively 
easy matter for DOD to provide (or to require that their contractors 
provide), a reasonable advance notice of contract cancellation or 
termination, 


Assistance to homeowners is another form of aid which ought to be 
considered. Homeownership is often thought to be a deterrent to mo¬ 
bility, primarily because of the financial loss which might be invol¬ 
ved in a ’’forced sale”. For the individual, the purchase of a home 
is in most cases the largest investment of a lifetime. Homeownership 
appears to be quite common among defense workers. Over half of the 
Boeing and Martin workers owned or were buying their^omes and nearly 
three-fourths of the Republic group were homeowners. In any situ¬ 
ation a forced or quick sale of a home is likely to involve the home- 
owner in a considerable loss. In the mass-layoff case those problems 
are undoubtedly compounded. As an example, the Martin layoff was 
clearly a major depressant on the local housing market. Construction 
of new housing units declined substantially and the vacancy rate for 
residential housing went up markedly. 


The direction of the relationship between homeownership and geo- 
graphic mobility is clearly established. Homeownership is associatea 
with immobility. At least fourteen different studies have presented 
evidence in support of this position. This pattern held for the 


£ut, at least in these 


Boeing, Martin and Republic groups as well, 
cases, the relationship does not appear to be very strong. Variation 
between individuals in homeownership accounted for less than five 


Leslie Fishman, ibid . 

^Leslie Fishman, et al., p. 20. 

7 6 

Wilbur H. Thompson, James W. Taylor and Leslie Fishman, 
pp. 11-13 - 11-16. 

Lawrence C. Hunter and Graham L. Reid, Urban Worker Mobility 
(Paris: Organization for Economic Cooperation and Development, 1968), 
p. 50. 


371 











ACDA/E-156 


78 

percent of the variation in geographic mobility. And in a multiple 
regression setting even this modest relationship seems to exaggerate 
the influence of homeownership on mobility. 


Hence, in situations studied, assistance to homeowners would not 
be expected greatly to facilitate geographic mobility. However, in 
other situations, homeowners’ problems can be important. Types of 
programs which might be pursued are many. Various corporations have 
recently been engaged in programs designed to limit or eliminate the 
losses which their transferred employees might enggunter in a forced 
housing sale. A number of programs have emerged. Those programs 
have been operating in normal labor market and housing market con¬ 
ditions; that is, they have not typically been associated with the 
distressed market in housing which one expects in the mass-layoff 
situation. Thus a policy patterned on the typical corporate plan, 
which attempts to completely eliminate loss to the individual, might 
be quite expensive. In another context, Adam Yarmolinsky has suggested 
that a public insurance scheme designed to prgject homeowners’ equity 
might be feasible and relatively inexpensive. This appears to be a 
more reasonable alternative and should be explored. 


Relocation allowances are another type of program which one 
would expect to be a significant inducement to geographic mobility. 
Relocation schemes have always played a role in Sweden’s labor market 
policy. 


Special financial support, implying payments of costs 
for interview visits, travel, household removal, 
temporary double households, and a lump sum called 
starting help, and equivalent in certain cases to 
more than a month's wages, is used to stimulate 

Piled'S ti^Il * . cimnnrf ic nm.r a -f uon ^ r» mnrp 

—O * r I “ *■ g2 — *' o — ' — — — 

than 15,000 cases per year. 


78 

Leslie Fishman, et al., pp. 49-51. 

79 

Trevor Bain, p. 35; and Leslie Fishman, et al., p. 132. 

80 

J. Roger O’Mera, ’’Changes in Company Aid to Transferred 
Homeowners,” Conference Board Record , Vol. 2, No. 3 (March, 1965), 
pp. 43-46? and J. Roger O’Mera, ’’Real Estate Problems of Relocated 
Employees,” Conference Board Record , Vol. 2, No. 8 (August, 1965), 
pp. 33-35. 

81 

Adam Yarmolinsky, ’’Homeowners Equity Insurance Plan,” un¬ 
published paper, August, 1969. 

82 

Organization for Economic Cooperation and Development, Labor 
Market Policy In Sweden (Paris: OECD, 1963). 


372 










ACDA/E-156 


Britain hasg^lso made arrangements for this kind of assistance in cer¬ 
tain cases. 

The U.S. Department of Labor has recently conducted some "experi¬ 
mental labor mobility" projects which inyolved helping workers in labor 
surplus areas to find employment elsewhere, paying for some or all of 
the mgying costs, and attempting to help the family settle in the new 
area. Of the 11,000 workers identified as being eligible for such 
assistance, nearly^OOO were offered a job and 3,500 of those accepted 
the job and moved. These relocation projects, combining financial 
assistance and interarea labor market information, seem to be a very 
substantial if not dramatic inducement to move. In connection with 
these projects one observer has remarked: 

An important experimental feature of some of the 
projects was payment of travel expenses to a 
worker for an interview with a prospective 
employer. Lack of such funds, was often a 
bigger o^gtacle to mobility than lack of money 
to move. 

In the experimental projects the amount of assistance to each 
individual was quite modest, ranging from $125 to $636, depending on 
the project. This seems to conform with the information collected by 
Lansing and Mueller in their study of geographic mobility^ They found 
cost of moving to be generally in the $100 to $500 range. This infor¬ 
mation indicates that money spent on relocation projects, especially if 
it is combined with a good interarea information network, could have 
very high returns. 


" Geographical and Occupational Mobility of Workers in the 
Aircraft and Electronics Industry ..., pp. 77 and 78. 

Audrey Freedman, p, 56. 

8 5 Ibid ., p. 57. 

86 

J U. S. Department of Labor, Bureau of Employment Security, 
"Moving Workers to Where Jobs Are," Employment Service Review 
Vol. 4, No. 6 (June, 1967), p. 39. 

87 

"Roger Lansing and Eva Mueller, "Geographic Labor Mobility 
In the U.S.: Recent Findings," Social Security Bulletin , Vol. 30, 
No. 3 (March 1967), p. 16. 


373 









ACDA/E-156 


Similarly, Section 231 of the Tax Reform Act of 1969 includes 
provisions both for homeowners and for relocation allowances in the form 
of deductions of moving expenses and of losses attributable to selling 
or buying a home or breaking a lease. 

Moving expenses incurred in connection with the start of work on 
a new job and which may be deducted include such indirect costs as 
house-hunting trips' and meals and lodging while in temporary quarters 
in the new location for 30 days after new-employment has been obtained. 
Generally, a maximum deductible amount of $1,000 prevails for such costs 
but an additional $1500 may be deducted for "qualified residence sale, 
purchase, or lease expenses. 

Retraining programs do not appear to have much relevance to the 
transition problems of defense workers. Defense workers are generally 
characterized as better educated, younger, and more skilled than the 
work force at large. For instance, Max Rutzick indicates that "The 
labor force in defense-associated industries is generally more skilled 
than the civilian labor force as a whole... 20.1 percent of the 4.7 
million defense workers in fiscal 1968 were in the skilled category; 
in the general labor force the proportion was 13.2 percent.Simi¬ 
larly, professionals constituted 14.4 percent of the defense work 
force compared with 12.8 percent in the general labor force.^0 Of 
course, the labor force associated with the Vietnam buildup is likely 
to be less skilled than the defense labor force in general.^ To the 
extent that this is true the need for retraining is correspondingly 
increased. 


n a 

oo 


Section 231 of the Tax Reform Act of 1969. 


89 

Max Rutzick, "Skills and Location of Defense-Related Workers," 
Monthly Labor Review , Vol. 93, No. 2 (February, 1970), pp. 11-16, 
especially p. 11. 

90 Ibid. 

91 

Such a phenomenon is suggested, at least for ammunition plants, 
in Bruce W. Macy, Robert E. Roberts and Patricia Quinlan, Ammunition 
Production for Vietnam: Impact on Southeast Kansas, A Report Prepared 
for the U.S. Arms Control andTDisarm ament Agency (Washington: Govern¬ 
ment Printing Office, ACDA/E-142, February 12, 1970), pp. 7-8. 


374 










ACDA/E-156 


Specific information on the retraining needs of two groups of 
defense workers is available. For technical and production workers 
engaged in missile production the necessity for retraining appears 
minimal. Of 121 defense occupations analyzed, only 22 appeared to 
require retraining in order to maintain an efficient use of skills. 
The skills associated with the othe^ 99 occupations appeared to be 
readily usable outside of defense. With respect to the transition 
problems of defense engineers, one study indicates little need for 
retraining through formal courses. Instead, the retraining required 
to switch from defense to nondefense Q employment can and should be 
handled through on-the-job training. 


Early retirement is a policy which might have limited relevance 
to the defense mass-layoff transition. While the evidence outlined 
above indicates that the older worker is apt to have a relatively dif¬ 
ficult transition, early retirement programs would benefit only a small 
minority of defense workers. In their recent study of pensions and 
severance pay as adjustment techniques for defense workers, Folk and 
Hartman refer to the relative youth and low seniority of the typical 
employee in aerospace employment. They observe that "The number of 
persons at or near normal retirement age is insignificant..." and that 
"... only about ten percent of the workforce would meet even the most 
generous of plausible eligibility requirements: for example, minimum 
age 50 and ten or more years of service." If one posits that most of 
the Vietnam-induced expansion of defense employment has also been among 
relatively young workers, then their conclusion can be generalized. 

Folk and Hartman after examining actual early retirement provisions in 
defense industry conclude that they are "inadequate as workforce adjust¬ 
ment devices because normal benefits are too small to support workers 
without an-OASDI pension, and early retirement benefits are even 
smaller." D 


9? 

"Carl H. Rittenhouse, The Transferability and Retraining of De¬ 
fense Engineers , Prepared for the U.S. Arms Control and Disarmament 
Agency, ACDA/E-110 (Washington: Government Printing Office, 1968), p.57. 

93 

Ibid. , pp.8 and 9. 

94 

See Hugh Folk and Paul Hartman, Pensions and Severance Pay for 
Displaced Defense Workers , Prepared for the U.S. Arms Control and Disarma¬ 
ment Agency, ACDA/E-138 (Washington: Government Printing Office, June, 
1969), p. 143. 

95 

Ibid,, p. 169. 


375 










ACDA/E-156 


The second set of policies to aid in the transition of the 
individual involved in a mass-layoff are income maintenance policies. 
Unemployment compensation is, of course, the most obvious example of 
such a policy. The inadequacy of unemployment compensation alone can 
be seen by reference to the defense industry layoffs. The Hughes study 
indicates that 28 percent Q of the men receiving unemployment compensation 
exhausted their benefits, u Information on benefit exhaustion was not 
available for the other groups. But almost 36 percent of the Republic 
group unemployed for at least 26 weeks, the maximum benefit 
period. Nearly nineteen (18.^ percent of the Martin group was un¬ 
employed for at least 30 weeks. 


These facts suggest that additional income maintenance programs 
might be called for in the mass-layoff situation. Severance pay is one 
among many possibilities. One problem, however, keeps severance pay 
from being an adequate financial cushion in some states. This is the 
conflict with unemployment insurance. In the Oklahoma Armour layoff, 
for example, many of the laid off ^rkers had enough work experience 
to be qualified for U.I. benefits. However, in Oklahoma, unemploy¬ 
ment ijgyrance is not payable while severance payments are being pro¬ 
rated. Thus, in cases where severance pay is used immediately for 
debt repayment, the worker has no alternative income source until 
severance pay has been officially depleted. Severance pay is usually 
calculated on the basis of one or two weeks’ pay for each year of 
service with the company. In some states where there is a conflict 
between U.I. and severance pay, the benefits are prorated over this 
calculated time period. As of January, 1964, there were seven states 

which did not permit payments of U.I. for the week in which severance 
pay was awarded; fifteen other states red^gj weekly U.I. benefits by 
the prorated amount of severance payment. Since most defense 


96, 


1K.VU1. 


n „ j? _ 

uaxu , 


o n 
< 4 . J • 


97 


Post Layoff Experiences, Republic Aviation Workers , p. 98. 


go 

Wilbur H. 


Thompson, et al., 


A-l and A-2. 


99 

George P. Shultz and Arnold R. Weber, Strategies for the Dis¬ 
plac ed Worker: Confronting Economic Change (New York: Harper aud Row,” 

T9557. " - 

10 Q Ibid. , p. 80. 

103 United States Department of Labor, The Operation of Severance 
Pay Plans and Their Implications for Labor Mobility , Bureau of Labor 
Statistics, Bulletin No. 1462 (Washington: Government Printing Office, 
January, 1966), p, 40. 


376 














ACDA/E-156 


workers have not built up a great deal of seniority at their jobs, 
severance payments to defense workers might be relatively small. 

After considering these and other obstacles to severance pay, 

Folk and Hartman conclude that "the provision of adjustment benefits 
must be pursued through improvement of the UI system." ^ They note 
that severance pay, like pensions is not closely related to need and 
that the UI system could be^g^tered to provide more adequate benefits 
by increasing the tax base. ~ A related possibility would be the pro¬ 
vision of a more realistic level of unemployment insurance benefits to 
laid-off defense workers, possibly funded as an additional defense 
contract cost. A study of the likely cost of such a program would 
provide useful information. 

Leslie Fishman has suggested that a special government "transi¬ 
tion" bond issue might be used as an income maintenance device. ’’The 
bonds would carry regular interest and repayment provisions, with one 
important exception. In case the owner was demobilized or was invol¬ 
untarily laid-off from his defense job, he would become eligible^ggr 
a premium payment of perhaps double the face value of the bond." 

It would, however, be quite difficult to identify "defense workers" 
at the subcontract level. 


Two related points should be kept in mind when considering such 
programs. First, the interrelationships between income maintenance 
programs and the labor market adjustment process should be considered; 
that is, income maintenance programs should be designed in such a way 
that the interference with the market adjustment process is minimized. 
For instance, income maintenance should not discourage geographic mo¬ 
bility or the acquiring of needed skills- An interesting example of 
the second type of interference arises with unemployment compensation. 
As of June, 1966 less than one-half of our states ^^owed a person to 
collect U.I. while enrolled in retraining classes. ' The proposed 


102 

Hugh Folk and Paul Hartman, p. 171. 

10 ~Ibid., pp. 170-171. 

^^Leslie Fishman, et al. , p. 234. 

^^U.S. Congress, 89th Congress, 2nd Session, House of Represen¬ 
tatives, Unemployment Insurance Amendments of 1966 , House Report 1636 
(Washington: Government Printing Office, June 17, 1966), p. 13. 


377 







ACDA/E-156 


1966 amendments to the U.I. Act stated: "Compensation may not be denied 
to workers who are undergoing train^gg with the approval of the State 
unemployment compensation agency.” The amendments were not adopted, 
however, and it now appears that at least 25 states still flatly deny 
benefits to trainees. In the remainder the Employment Security Commission 
makes the decision as to eligibility as stated in the proposed amend¬ 
ment. ^7 This is truly ironic; in other countries—the U.K. and Sweden— 
unemployment insurance benefits are used to encourage retraining, not 
to discourage it.-^3 Second, very little systematic investigation of 
these interrelationships has been conducted to date. This is one impor¬ 
tant area for further research. These remarks are intended only as a 
reminder that there are possible areas of conflict between the adjust¬ 
ment process and income maintenance programs. Where possible, income 
maintenance programs, which are clearly reeded and desirable in such 
transition periods should be designed to minimize the conflict. 


VIII.6 RESEARCH NEEDS 

Throughout this discussion attention has been called to specific 
areas in which knowledge concerning the transition was particularly 
inadequate. Specific points included: 1) knowledge about the 
reemployment process in small communities is limited; 2) the condition 
of the labor market as an important factor in the transition has been 
neglected; 3) information on the impact of information networks on the 
reemployment experience is limited; 4) knowledge concerning adjustments 
which the buyers of labor might make in the face of a mass-layoff is 
completely lacking; 5) information on the interrelationships between 
various remedial measures and the adjustment processes is limited. 

The overall problem, of course, is the mass-layoff transition. 
These are merely some of the factors which impinge on the reemployment 
experience. Their influence on the transition, in conjunction with the 
influence of other relevant factors, should be considered jointly and 
simultaneously. At the outset it is imperative to adopt a time-process 
orientation toward the problem. Time from layoff is an important 
dimension in many of the adjustment processes. Of interest also is the 
p oint in time at which an individual becomes employed or becomes 


106 

107' 


Ibid., p. 3. 


Based on information obtained in a telephone conversation with 
the Director of the Kansas City Bureau of Unemployment Insurance of the 
Manpower Administration. 

108 

Richard C. Wilcock and Walter H. Franke, pp. 236-237. 




378 









ACDA/E-156 


unemployed, and the point In time at which an individual moves from 
the local labor market. It would be helpful to be able to specify the 
relationship between reservation salary and duration of unemployment, 
and to learn at what point in time an individual makes the decision to 
undergo retraining. 

The information necessary to jointly consider all the relevant 
variables is quite large. This suggests that future research projects 
in this area ought to concentrate on obtaining a great deal of infor¬ 
mation about the reemployment process of a relatively few workers. For 
instance, the useful information which could be obtained by closely 
observing the reemployment experience of a sample of 500 discharged 
workers is potentially much greater than the information which could 
be obtained by one mail survey of a population of 5000 laid-off workers. 
Research to this date has focused on the overall impact of the layoff 
on a large group of workers. Now is the time to move to a more inten¬ 
sive analysis of the mass-layoff problem. 

VXI1.7 POLICY CONCLUSIONS 

The following policy conclusions were derived from the analysis: 

1. Greater reliance and support should be given to the "tent interview” 
process run by the affected company or as an on-site program of the 
Employment Service. 

2. The Computerized Job Bank and matching programs should be expanded 
and include special consideration of the defense industry occupa¬ 
tional structure. 

3. A minimum of 6 weeks advance notice of contract cancellation or 
termination should be given to workers to prepare for a smooth 
transition. 

4. A public insurance plan is needed to give homeowners liquidity of 
equity and protection against erosion of value. This plan will 
eliminate a potential impediment to mobility. 

5. The "experimental labor mobility" projects of the U.S. Department 
of Labor should be expanded to include laid-off defense workers. 
These projects include assumption by the government of relocation 
costs including travel expenses for an interview with a prospective 
employer. 


379 






ACDA/E-156 


6. Pilot retraining projects for laid-off defense workers which empha¬ 
size on-the-job-training as opposed to classroom training should be 
expanded, 

7. The social security laws should be revised to provide early retire¬ 
ment at no penalty for laid-off defense workers, 

8. The conflicts between regulations governing unemployment insurance 
eligibility and provisions for severance pay should be eliminated. 
These conflicts exist in 2 2 states and serve to reduce income to 
the laid-off worker. 

v 

9. Similar conflicts (in 25 states) between the unemployment insurance 
system and retraining programs should also be eliminated. These 
conflicts serve to discourage retraining. 


380 


/ 



ACDA/E-156 

BALANCE OF PAYMENTS IMPACT OF A 


VIETNAM DISENGAGEMENT 


by 

Emile Benoit 


IX.1 PRELIMINARY RESERVATIONS 

A nuclear weapons freeze will probably have only a very small effect 
on U.S. imports and exports, one that (in view of the general limitation 
on balance of payments impact analysis described below) is hardly 
woith trying to measure. However, the effects of an ending of the 
Vietnam War should be large enough to warrant thinking about the kind 
of impact to be expected. 

In general, estimating balance of payments impacts is one of the 
most difficult and unrewarding of enterprises. This is because of the 
variety of policy decisions that can significantly affect individual 
balance of payment items, and the highly interdependent nature of these 
items. This interdependence reflects three different types of inherent 
links: 

1. Many payment items are closely linked with specific receipts, 
e.g., foreign aid with exports, foreign direct investment with 
exports, and with later receipts of dividends, royalties, interest, 
etc. 


2. Within some limits, total deficits or total surpluses tend to 
be self-limiting by inducing adjustments in the country experienc¬ 
ing them. Thus, a country suffering a large deficit (or even a 
decline in a customary surplus) tends to make a variety of special 
efforts to promote exports, restrict imports, attract new capital 
inflows, and restrain capital outflows. If tightening of 
monetary and fiscal policy and foreign exchange or import controls 
do not suffice, devaluation may be attempted. While the pressures 
on surplus countries are less powerful, even here similar forces 
are at work — as is demonstrated by the two German revaluations 
of recent years. 

3. There is even some tendency for countries to respond directly 
to changes in current balances with particular trading partners, 
on a bilateral basis, and to modify their trade, aid, services 

or capital flows so as to seek to preserve a pre-existidg balance 
Thus a notable decline in U.S. imports from a given area is likely 
to induce some parallel contraction of that area’s dollar imports 
even before the net effect on the area’s reserves has made such a 


381 


ACDA/E-156 


contraction necessary. In most developing countries where 
reserves are perennially inadequate, such responses are 
particularly quick to occur. 


These factors impose almost insurmountable difficulties for 
balance of payments projections since, in this case, the economists* 
ceteris paribus becomes entirely unrealistic! One knows in advance 
that this is precisely what will not happen, and that the deviations 
from what can be predicted on this basis will be large enough to wipe 
out much or all of the validity of the prediction. 

The hazards of balance of payments forecasting are beautifully 
illustrated by what was the most elaborate, sophisticated and well- 
publicized balance of payments projection ever made, namely the 
Brookings Institution Projection in 1963.^ It projected a U.S. surplus 
of $6.7 to $9.2 billion on goods and services (exclusive of military 
transfers) by 1968, and a balance of -$.6 to -H$1.9 billion on goods, 
services, and government transfers and loans. In actuality the surplus 
on goods and services by 1968 had fallen to under $2 billion, and the 
deficit on goods, services, and government loans and transfers was $3.4 
billion—this despite a freak surplus on the balance of payments as a 
whole (as usually defined, either on a liquidity or official settlements 
basis), arising from a reversal of the usual U.S. deficit on capital 
account. 


No doubt the Vietnam War can be used to explain much of the dis¬ 
crepancy. But this illustrates very well both the likelihood of unfore¬ 
seeable changes, and, even more important, the interrelatedness of the 
items—for if the Vietnam War with its adverse effect on the commodity 
balance had not occurred, it is quite unlikely that U.S. capital export 
controls would have been so severe or that U.S. interest rates would 
have been raised so high to attract or retain short term funds, or, 
that foreign countries would have had such large dollar surpluses to 
invest in Wall Street, etc. 


The significance of the above comments is that projections of 
balance of payments impacts have a primarily heuristic significance, 
since any projected change, if it actually occurs, is likely to set 
up countervailing forces which will tend to limit or reverse the des¬ 
cribed change—and one cannot readily predict how strong or effective 


Walter S 
(Washington: 


. Salant, et al ., The U.S. Balance of Payments in 1968 
The Brookings Institution, 1963). 


4 


382 









ACDA/E-156 


these countervailing forces will be. Such projections should therefore 
be viewed as an exercise showing a mere potentiality, subject to 
modification as the potentiality comes closer to actuality. 

A similar reservation attaches to retrospective analysis of the 
extent to which particular events exercised an adverse influence on 
the balance of payments. Even if the gross effect of the particular 
events (such as the war) can be shown to have exerted such and such 
an adverse effect, one cannot really tell to what extent such adverse 
effects stimulated offsetting payment flows which reduced the net 
adverse effect to some smaller figure. Since at any one time the 
number of forces acting in the balance of payments is very large, and 
since any modifications they make on the balance of payments tend to 
stimulate offsetting flows, as previously described, it is never 
possible with any assurance to know what part of the actual measurable 
change in the balance of payments has been produced by one particular 
set of events - even if one can say with some assurance that, other 
things remaining the same, these events would have produced a gross 
effect of a given amount. Our own analyses and conclusions in 
what follows are intended to be subject to these qualifications, even 
though in the interest of brevity, we do not repeat them. 

IX. 2 THE NATURE OF THE BALANCE OF PAYMENTS IMPACTS OF THE WAR 

Two published estimates of the impact of the war on the U.S. 
balance of payments have influenced this present study: 1) "The War in 
Vietnam and the U.S. Balance of Payments,” by Leonard Dudley and 
Peter Passell (henceforth referred to as D-P) in the Review of 
Economics and Statistics , Vol. L, No. 4 (November, 1968),pp. 437-442; 
and 2) "War in Vietnam and the United States Balance of Payments” by 
Douglas R. Bohi, also in The Review of Economics and Statistics , Vol. 
LI, No. 4 (November, 1969), pp. 471-474. 

These estimates referred to the impact of the war in 1967. Our 
own estimate is larger than either the D-P or Bohi estimates, mainly 
because it refers to the peak war expenditure in calendar year (CY) 

1968 or fiscal year (FY) 1969, rather than 1967. Our data and methods 
also differed somewhat from those used by D-P or Bohi, which also 
differed from each other, but the largest single element in our own 
estimate was derived by a method proposed by Bohi. 

In our view, there are three conceptually distinguishable types of 
impact that the war has had on the U.S. balance of payments: 1) the 
so-called "direct” impact of higher U.S. overseas defense expenditures 
and related foreign aid; 2) the "structural” impact, measured by the 
import content of defense procurement, and the diversion of potentially 


383 







ACDA/E-156 


exportable resources into such procurement; and 3) the ’’inflationary" 
impact, i.e., the abnormal rise in imports attributable to defense- 
induced excess demand, with disproportionate price increases, reducing 
U.S. international competitiveness. As we shall see, it is difficult 
in practice to distinguish between the second and third types of 
impact. 

IX,3 THE PEAK YEAR OF VIETNAM COSTS 

f 

The identification of those parts of defense expenditure that 
are "for Vietnam” is exceedingly difficult and uncertain, because 
some forces, especially air and naval forces used in Vietnam, are based 
outside Vietnam and could be retained whether or not there were a war 
in Vietnam. The attribution of a correct share of their total costs 
to their activity in Vietnam is highly uncertain. A similar question 
arises with respect to the correct distribution of overhead cgsts of 
many military functions between Vietnam and non-Vietnam uses. 

For this reason- a simple incremental approach has sometimes been 
followed, attributing to Vietnam the whole increase in U.S. gross 
military outlays sipce the Gulf of Tonkin resolution and the big U.S. 
buildup in Southeast Asia. The base year utilized here is usually CY 
1964 or FY 1965. While this approach is very rough (since obviously ^ 
not all the increase in expenditures is really attributable to Vietnam ), 
it may for certain purposes be the best available. 

As shown in Table 1 below, defense purchases in FY 1969 were 
slightly higher than in CY 1968, in current prices, but slightly lower 
at constant prices. Moreover calendar 1964 was slightly higher than 
fiscal year 1965. We will therefore feel free to use the difference 
between CY 1964 and 1968 as the measure of the size of Vietnam programs 
at peak, in place of the difference between FY 1965 and FY 1969, where 
data on the latter time period are not conveniently available. It is 
actually an open question as to which period provides a more suitable 
measure. 

IX. 4 THE RISE IN U.S. OVERSEAS DEFENSE EXPENDITURES AND RELATED AID 

The least controversial adverse balance of payments effect of 
the war in Vietnam is the so-called "direct impact”, namely the rise 


For an informed discussion of the incremental costs of the Vietnam War 
see Charles L. Schultze, Setting National Priorities: The 1971 Budget 
(Washington: The Brookings Institution, 1970) , pp. 47-49. 

3 

For example, the estimated $6.5 billion of price increases on the $50 
billion of pre-Vietnam defense programs. 


384 






Comparison of U.S. Defense Purchases 
CY 1964-68 and FY 1965-69 


ACDA/E-156 


i 


U 

G 

(X 

in 

Oh 


G 

03 

10 

VD 

CO 

O 

CO 

0) 

CTh 

a) 

*H 

G 

CO 

r—l 

a 

rH 

03 

03 



rH 

4~t 

X 

r* 


*H 

03 

Q 

o 

Cm 

CM 

<J> 

'w 


Oh 

vD 

CO 

• 

• 

• 

Oh 


CN 

r^ 

</> 

m 

CNJ 


Oh -<r 

00 in 

r^* m 


m 

CO 

CN 



Cd 

o 









CO 

o 









U 

rH 







Ml 


o 

1! 







•H 

03 

44 

Oh 

vO 

00 

<r 

o 

CO 

CO 

O 

cd 

\Q 

• 

• 

• 

• 

• 

• 

•H 

O 

rH 

Qh 

r>. 

vO 

CNJ 

O 

00 

CO 

rH 

*H 

4-4 

rH 

Oh 

00 

rH 

o 

00 

rH 

S< 

Ml 

0) 





rH 


w 

CM 

Q 








M 



N_/ 








I 

u 

G 

Cm 


Q 


•H 

CO 


CO 

X V 

G 

O 

oo 

vO 

CNJ 

o 

00 

CNJ 

cu 


03 

•H 

• 

• 

» 

* 

• 

• 

CO 

00 

CJ 

rH 

rH 

<r 


rH 

CNJ 

00 

CO 

in 

•H 

rH 

vO 

<r 

rH 

VO 


rH 

4G 

a 

Oh 

rH 

CM 

•H 

</> 

</> 







id 


G G 


cn 

cd 

03 

G 

U 

G 


G 


£ E 


yj 

0} 

0) 

u 

o 

G 


E 


00 

G 

•H 

£ 

O 




CO 








rH 



H 








o 

44 


O 

O 



^5 



&»S 

4-4 

*H 


44 

o 

CNJ 

<N1 

in 

CO 

CN 

CN 


O 

03 

cd 

<—J 

• 

• 

• 

» 

• 

• 

03 

•H 

O 

rH 

il 

vD 

CNJ 

CNJ 

Oh 

Nf 

CO 

00 

rH 

•H 

44 

00 

CN| 

rH 

rH 

CN 

rH 

rH 

cd 

& 


0) 

in 

fH 

rH 


rH 

rH 


CM 

6 

CM 

a 

Oh 








M 



I—1 







03 




V - ' 







03 











rf) 











0) 

1 










O 

U 










U 

G 

G 









G 

CM 

•H 


/*N 







O 



44 

G 







W 

03 

CO 

G co 

O 

O 

o 

o 

Oh 

Oh 

o 


C0 

03 

03 03 

*H 

• 

• 

• 

• 

* 

• 

’"G 

G 

CO 

U U 

rH 

00 

o 

00 

00 

oo 

o 

G 

03 

03 

M *H 

rH 

c- 

m 

CN 

r-- 

<r 

CO 

*0 

CM 

X 

G M 

*H 

<jy 







0) 

O 

O CM 

JO, 







CO 

Q 



</> 







03 




v-/ 







44 











o 







00 



Oh 

G 







vO 



vO 








1 



1 

H 





oo 

NT 

<r 

Oh 

m 

in 

O 





vO 

vO 

vO 

vO 

vO 

vD 

Pm 





Oh 

Oh 

Oh 

Oh 

Oh 

Oh 






rH 

rH 

03 rH 

rH 

rH 

03 rH 



385 


ACDA/E-156 


^he price index used is actually not the implicit deflator for defense 
purchases, but for total Federal purchases. However, four-fifths 
of Federal purchases are for defense purposes, so the distortion is 
probably not serious. In earlier years, when a constant price 
defense series was published, the calculated implicit deflator for 
defense purchases was almost identical with the published implicit 
deflator for Federal purchases. Thus between 1949 and 1963, the 
implicit deflators for Federal purchases showed a 47% price rise,and 
for defense purchases a 48% rise. 

Sources: Economic Report of the President Transmitted to the Congress 
January, 1967 (Washington: Government Printing Office, 1967), 
Tables B-l and B-3, pp. 213 and 217; and the corresponding 
document for February 1970, Tables C-l and C-3, pp. 177 
and 181. 


386 






ACDA/E-156 


in U.S. defense expenditures abroad, comprising expenditures by U.S. 
defense agencies for construction and servicing of defense facilities 
by foreign contractors and workers, the purchase of supplies abroad 
for the use of U.S. or allied forces, and foreign expenditures of U.S. 
defense personnel. All such expenditures are counted as imports of 
services and thus as debit items in the U.S. balance of payments. Such 
expenditures have been important not only in Vietnam itself but in 
countries in which the U.S. has built up large new defense facilities 
(e.g., Thailand.), or which have served as important transportation 
and staging areas (e.g., Japan, the Philippines) or which have earned 
substantial sums trom tourist type services to U.S. military personnel 
on R&R leave (e.g., Thailand, Hongkong, Singapore). 

Estimates of these expenditures in most of the individual coun¬ 
tries have been publicly available only since December 1969. As shown 
in Table 2 below, the rise between 1964 and 1968 for most of the rele¬ 
vant countries was about $1.5 billion. If we throw in another $100 
million (as a guess) for United States R&R expenditure and offshore 
procurement in Hongkong, Singapore and Malaysia, it would raise the 
total to $1.6 billion. 

U.S. economic aid that is closely associated with the war seems 
limited to Vietnam and Laos and possibly to Thailand. The amounts 
per capita are so extremely large in Vietnam and Laos in comparison 
with U.S. aid to other countries, as to make it clear that this aid 
is essentially intended as support for a defense effort much larger 
than these countries could otherwise afford. Moreover, the aid in 1964 
was already of this character. Thus in these cases we will take the 
full amount of the aid in 1968 rather than the difference between 1964 
and 1968. In 1968 U.S. economic aid to Vietnam is estimated at $558.1 
million^ and tc Laos at $52.8 million.^ In the cas^ of Thailand we 
include only the ’rapid increase between 1964 and 1968 amounting to 
$24.4 million. 6 This gives us a total of war-related economic aid of 
$635.3 million in 1968. 


Testimony of Secretary of Defense Melvin R. Laird, U. S. Congress, 

91st Congress, 1st Session, Briefing on Vietnam, Hearings Before the 
Committee on Foreign Relations, U.S. Senate, November 18 and 19, 1969 
(Washington: Government Printing Office, 1969), p. 118. 

5 "U.S. Aid to Laos, May, 1968," (Vientiane, Laos: United States Agency 
for International Development, 1969), revised October, 1969, processed. 

^United States Embassy estimates put U.S. economic aid at $14.8 million 
in 1964 and $39.2 million in 1968. 


387 








ACDA/E-156 


TABLE 2 

g 

War-Related Rise in U.S. Defense Expenditures Abroad 

(millions of dollars) 

1964 1968 Change 


Japan 

$321 

$581 

$260 

Korea 

91 

301 

210 

Philippines 

58 

16) 

111 

Ryukyu Islands 

115 

202 

87 

Taiwan 

21 

76 

55 

Thailand 

34 

318 

284 

South Vietnam 

64 

558 

494 

TOTAL 

704 

2205 

1501 

rt For goods and 

services 



SOURCE : Cora 

E. Shepler and Leonard 

Campbell, 

’'United States 


Defense Expenditures Abroad^' Survey of Current Business 
Vol. 49, No. 12 (December, 1969), Table 2, p. 44. 


388 










ACDA/E-156 


The adverse impact of this aid on the U.S. balance of payments is 
severely limited, however, by the fact that the aid dollars are 
closely tied to U.S. procurement. While some substitution possibilities 
exist by programming aid dollars for items that would otherwise 
require free dollars, it has been generally supposed that in recent 
years about 80% of the tied aid did add to dollar exports, overall. 
Applying a similar ratio in this case would suggest that the adverse 
effects of this aid to the U.S. balance of payments would be just 
over $127 million. This would bring the total freely disposable 
foreign exchange in the hands of Asian countries as a result of U.S. 
Vietnam spending and related foreign aid to over $1.7 billion in 
1968/ 

Some of this $1.7 billion has been added to the recipients 1 
reserves, but some has been used for the importation of non-dollar 
goods'. As shown in Table 3 below, Vietnam’s recorded trade deficit 
with the European Common Market countries rose from an average of 
$5.6 million in 1963 and 1964, to an average of $35.3 million in the 
years 1965-1968. 

Moreover, not reflected in the recorded data at all is a substantial 
amount of capital flight generated by U.S. defense and aid expenditures, 
especially in Vietnam. There, the severely over-valued piaster together 
with lenient treatment of import declarations make it profitable to spend 
large amounts to obtain import licenses. It has then been possible by 
substantial overinventorying of imports to arrange with the exporters 
to make covert dollar deposits outside of Vietnam to the account of an 
agent of the Vietnamese importer. (Similar things happen, of course, 
in other countries with exahange controls*) To the extent that such 
deposits are set up outside the U.S. (e.g., Switzerland or France), 
they result in lower realized dollar earnings for U.S. residents than 
would be consistent with recorded Vietnamese dollar imports. In 
this connection it may be of interest to note that the U.S. regional 
balance of payments with all of Asia and Africa, except Japan, South 
Africa, and Oceania shows a $1 billion smaller increase in gold and 


^This does not include military assistance programs (MAP) which are so 
closely tied to U.S. procurement as to be generally assumed to have 
no adverse balance of payments impact. Actually, to the extent it 
includes commercial consumables, such programming may resemble economic 
aid and provide some substitution possibilities, but the amounts are 
assumed to be too small to be significant. 


389 



ACDA/E-156 


TABLE 3 


Pattern of Vietnam’s Trade with 
European Economic Community 
(millions of dollars) 



Vietnam 
Exports 
to EEC 

Vietnam 

Imports from 

EEC 

Vietnam* s 
Trade Deficit 
with EEC 

1968 

$ 9.5 

$46.1 

$36.6 

1967 

11.8 

44.8 

33.0 

1966 

15.2 

65.2 

50.0 

1965 

23.3 

45.1 

21.8 

1964 

28.9 

33.1 

4.2 

1963 

32.4 

39.4 

7.0 


SOURCES: Direction of Trade: A Sunnionipnf to International Financial 

- —- - - — ——I --r.„ ■ . , , .i A,. , .in n ~ ■■ ■— O - — ■ — -.1 , ■ — 

Statistics, Annual 1963-67 (Washington: International 
Monetary Fund and The International Bank for Reconstruction 
and Development, 1969), p. 64 and the corresponding document 
for June, 1969, p. 66. 


; 


390 







ACDA/E-156 


dollar holdings in 1968 and $2.1 billion smaller in 1969 than could 
be explained on the basis of known transactions with the United States, 
whereas Western Europe, including the United Kingdom, had a $1 billion 
greater gold and dollar inflow in 1968 and $6.8 billion greater in 
1969 thaij could be explained by their known direct transactions with 
the U.S. How much of this Afro-Asian gold and dollar drain actually 
derived from Vietnam would be difficult to ascertain, as there are 

other possible sources for such discrepancies than deliberate capital 
flight. 

IX.5 STRUCTURAL IMPACTS OF HIGHER DEFENSE PROCUREMENT 

A large rise in defense expenditures, is likely to have two 
adverse structural impacts for the balance of payments: the additional 
defense procurement both diverts industrial resources from potential 
exports, and requires, by way of import-content, additional imports of 
raw materials, components, etc. In principle, these effects are dis¬ 
tinguishable from adverse price effects arising from an excess of aggre¬ 
gate demand, though in practice they may not be. 

As shown in Table 4 below, defense procurement doubled between 
FY 1965 and FY 1969. Had it remained unchanged, with other things as 
they actually were in FY 1969, then the available civilian supply might 
have been $12.2 billion larger, and even with the reduced civilian pro¬ 
pensity to export of FY 1969, exports would have been about $35.3 
billion instead of $34.3 billion—i.e., about $1 billion higher than 
they actually were in FY 1969. 

There is a serious question raised by this estimate, however, in 
that it implicitly assumes that a freeze on defense procurement would 
not have slowed the growth of total output, but merely increased the 
growth in civilian output. This presupposes that inflationary expan¬ 
sion would have been pushed just as hard even if the war had not 
occurred. This seems unrealistic, and is inconsistent with the assump¬ 
tions underlying the estimate of the effects of excess demand in our 
next section. Thus it does not appear that we can validly add this 
estimate of structural export diversion to the inflation effect as we 
have calculated it in the next section. 


Q 

Evelyn M. Parrish, "The U.S. Balance of Payments: 

Year 1969," Survey of Current Business , Vol, 50, No. 3 (March, 1970), 
Table 9, Lines 6 and 27, p. 48. 


391 




ACDA/E-156 


TABLE 4 

Estimated Diversion of Exports into Defense Procurement 
(current prices in billions of dollars) 




FY 1965 

FY 1969 

1 . 

Domestic Production of Goods 

$327.5 

$446.3 

2. 

Exports of Goods 

25.5 

34.3 

3. 

Imports of Goods 

19.8 

34.2 

4. 

Defense Procurement 

11.8 

24.0 

5. 

Available Civilian Supply 
(1-2+3-4) 

$310.0 

$422.2 

6 . 

Average Civilian Propensity 
to Export (%) (2 t5) 

8.22% 

8.12% 

7. 

Hypothetical FY 1969 Exports with 

FY 1965 Level of Defense Pro¬ 
curement 


$ 35.3 


C(422.2 + 12.2) X .0812H 


Note: For concepts used, see text. 

Sources: Production and Trade from U.S. Department of Commerce, Survey 
of Current Business , Vol. 46, No. 3 (March, 1966), pp. S-l, 18 
and Vol. 49, No. 9 (September, 1969), pp. S-l, 36. Procure¬ 
ment from U.S. Department of Commerce, Defense Indicators , 
Series ES-4, No. 68-2 (July, 1968), Table 3, p. 36 and No. 69-9 
(October, 1969), Table 3, p. 23. 


392 










ACDA/E-156 


The other structural impact is the import content of the rise 
in defense procurement, D-P made a rather elaborate estimate of this 
for the year 1968, involving a separate analysis of the Vietnam expen¬ 
diture bill of goods by 30 major industry sectors and the derivation 
of import coefficients by the application of interindustry analysis. 

The estimated total import content was $1.12 billion. Even if one 
accepts the accuracy of this type of import-content estimate (and there 
are some fairly serious questions to be raised about it), such effects 
can hardly be distinguished in practice from the very large rise in 
imports induced by war inflation, which will now be examined. 

IX. 6 THE IMPORT BULGE FROM EXCESS DEMAND 

The method used here to measure the impact of war-induced demand 
was suggested by Douglas R. Bohi, in the article previously cited. 

It is based on the simple premise that in the absence of the Vietnam 
War, the U.S. GNP would have grown at a rate of 5.5% (4% in real terms 
and 1.5% in prices) and that any excess above 5^ represents the pres¬ 
sure of excess demand from the war. GNP rose from $653.9 billion in 
FY 1965 to $900.6 billion in FY 1969, but by our calculations would 
have been only $810.1 billion if GNP has risen only by 5.5% per annum . 
Thus the additional GNP in FY 1969 arising from the war was $90.5 
billion. Both Bohi and D-P agree on a marginal propensity to import 
of .0562. Applying this to the $90.5 billion of extra GNP attributable 
to Vietnam-induced inflation implies additional imports of $5.09 
billion arising from this excess demand. 

i 

It does not seem possible in practice to distinguish, within this 
"excess demand" effect, the particular effects of structural distortions 
on the one hand and of loss-of-competitiveness price effects on the 
other. We have already noted that the export diversion estimate was 
implicitly inconsistent with the "excess demand" supplementary imports 
estimate presented in this section. This is further indicated by 
the fact that if we assume a growth of domestic production of goods 
(line 1 in Table 4) limited to 5.5% per annum , then the hypothetical 
level of exports that could be achieved in 1969 falls below the level 
of civilian goods to defense procurement after FY 1965. In short, 
without the actual history of inflationary developments, exports would 


^We prefer this method to the one used by D-P involving an attempt to 
measure the change in the relative share of U.S. trade in the trade of 
all industrial countries. There are great difficulties here in adjust¬ 
ing for trend and for the special influence of the rising intra-bloc 
trade of the European trade blocs. 


393 








ACDA/E-156 


not have risen above the levels actually achieved despite a freeze 
on defense procurement and the structural diversion of resources from 
potential exports into defense procurement would not be demonstrable. 

An even more obvious overlap applies in the matter of the import 
content of the rise in defense procurement. The $5.09 billion of 
excess imports we have estimated to arise from excess demand clearly 
include the import contents of the expanded activity of the defense 
industries where the excess demand largely originated. Consequently, 
the re is no hope, of separately identifying the imports attributable to 
structural shifts in import requirements on the one hand, and those 

attributable to the rise in aggregate import demand on the other. 

Unfortunately, there is presently no way to isolate the effects 

of price changes from structural changes through identifying the 
volume effects of international price movements. We can point to 
price changej^that made U.S. exports less competitive from 1964 to 
1968 or 1969, but lacking a knowledge of price elasticities we cannot 
translate such information into conclusions as to their relative 
effects on imports. 


IX.7 FEEDBACK EFFECTS 

We have so far estimated the gross balance of payments impact of 
the defense buildup in the peak year at around $6.8 billion, of which 
$1.7 billion was the direct outflow of dollars into defense spending 
abroad and unprogrammed aid uses, and $5.09 billion was the rise in 
U.S. imports from inflationary excess demand — reflecting structural 
distortions as well as loss-of-corapetitiveness price effects. 

The rise in U.S. imports, however, necessarily implies a rise in 
U.S. exports, or other dollar receipts, to the extent that other 
countries* exports use imported U.S. materials or components, or 
are produced by affiliates of U.S. companies which later remit to the 
U.S. the profits on the transactions, etc. These quasi-automatic 
indirect balance of payments benefits to the U.S. from its own imports 
may be designated as feedback effects. Bohi ( op . cit .) estimates them 
at 40% of the imports, citing in support of his'contention an unpub¬ 
lished AID study. D-P on the ether hand, argue extensively, on 

"^Thus from 1964 to the third quarter of 1969, U.S. wholesale prices rose 
by nearly 13 percent whereas the wholesale prices of all developed areas 
rose only 6 percent, and U.S. import prices (reflecting the export prices 
of its comeptitors) rose by only 8 percent. The significance of even 
these comparisons needs to be qualified by the recognized serious weak¬ 
nesses of trade price indices, and by the ambiguity in the meaning of 
changes in them,reflecting as they may either genuine changes in the 
prices of comparable items, or changes in the relative weights of dif¬ 
ferently priced items. 


394 


i 





ACDA/E-156 


theoretical grounds, for a much smaller feedback effect of only 22%. 
While the evidence is certainly inadequate on this subject, the smaller 
of the estimates is much easier to credit—especially considering the 
lack of published evidence supporting the Bohi position. If we use the 
22% feedback factor, this reduces the adverse balance of payments effect 
of our $5.09 billion of war-induced imports to $3.97 billion,, 

Adding this to the $1.7 billion net outpayments from defense 
expenditures and related foreign aid,^ would bring the total adverse 
payments effects to $5.7 billion. It is of interest to compare this 
with the actual deterioration of the U.S. payments. Between 1964 and 
1968, the U.S. balance on goods, services and transfers changed from 
plus $5,883 million to minus $336 million, i.e., it deteriorated by 
$6.2 billion. If our estimate of $5.7 billion for the gross adverse 
effect of the war had no further offset, it would account for over 90% 
of the total deterioration in the current account since 1964. Obvious¬ 
ly, however, this would not be a realistic assessment since the coun¬ 
tries receiving this inflow of dollars would ordinarily expand their 
dollar expenditures. The reader is reminded of our critical comments 
on the interdependence of payment flows expressed at the beginning of 
this paper. It should be noted that as late as 1967 the U.S. had a 
current account surplus of more than $2.2 billion. All that one can 
legitimately conclude is that the direct and indirect costs of the war 
have exerted a multi-billion dollar net adverse effect on the balance 
of payments, and greatly help to explair the replacement of the custo¬ 
mary U.S. current account f s surplus by a sizeable deficit. This 
deficit grew larger in 1969, rising from $336 million in 1968 to 
$885 million. A positive balance reappeared in the last quarter of 
1969 and has continued growing to over $900 million in the first half 

of 1970. 13 


"^Leonard Dudley and Peter Passell, ’’Reply to Comment by Douglas Bohi, 
T he Review of Economics and Statis tics, Vol. LI, No. 4 (November, 1969), 
pp e 474-475. 

1 9 

The foreign aid component has already, as will be recalled, been dis¬ 
counted by 80% to allow for programmed expansion of recipients' dollar 
imports. 

13 David T. Devlin, "The U.S. Balance of Payments: First Quarter 1970," 
Survey of Current Business, Vol. 50, No. 6 (June, 1970), Table 1, Line 
31, p. 35; and Evelyn Parrish, "The U.S. Balance of Payments: Second 
Quarter 1970," Survey of Current Business , Vol. 50, No. 9 (September, 
1970), Table 1, Line 31, p. 36. 


395 










ACDA/E-156 


IX. 8 THE BALANCE OF PAYMENTS IMPACT OF A VIETNAM WITHDRAWAL 

Unfortunately, the balance of payments implications of a Vietnam 
withdrawal are not necessarily symmetrical with those of the past 
buildup, and the deterioration of the balance of payments attributed 
to the war will not necessarily be eliminated by ending the war. Here 
are a few of the reasons. 


1) Defense prices like other prices move with a rachet-like 
quality—going up far more readily than down. Fiscal Year 1969 
defense prices appear to have been at least 13 percent higher than in 
FY 1965, and are likely to rise regularly in future years. 

2) Even if U.S. forces are completely withdrawn from Vietnam— 
and this is by no means a foregone conclusion—the U.S. has appreciable 
commitments in Thailand, Laos, Cambodia, and Korea, not to mention the 
commitments in China-Taiwan, Japan, Indonesia, Australia, New Zealand, 
the Philippines, and Europe. Since the big U.S. buildup in Vietnam, 

China has become a nuclear power, and the dangers of a total withdrawal 
of American power from the Pacific would appear to have multiplied. 

Under the Guam doctrine the U.S. will not now provide military support 
on a unilateral basis to an Asian ally unless that ally is subject to 
massive external invasion or nuclear threat, but maintenance of sub¬ 
stantial forces in the Far East will probably be required to sustain 
even this commitment. 

3) According to recent projections developed by this writer in 

another study not yet published, if the Vietnam War ends by 1973, U.S. 
defense expenditures abroad are likely by 1974 to fall about $62 million 
below their 1968 level in the Philippines, nearly $300 million in Thai¬ 
land and over $300 million in Vietnam. If we further assume cuts halfway 
back to 1964 levels in Japan, Korea, the Ryukyu Islands and Taiwan, this 
would involve a total gross cut of close to $1 billion-about 57 per¬ 

cent of the direct peak balance of payments impact of the war. The net 
improvement in the U.S. balance of payments would, of course, be much 
lower, since the countries earning fewer dollars would no doubt seek to 
restrict their imports, expand their exports, or attract more foreign 
investment. 

4) The import bulge from defense inflation would be more difficult 
to reverse. This inflation has acquired a momentum of its own (in the 
form of wage-price leapfrogging) and is not to be ended without heavy loss 


■S' 


396 











ACDA/E-156 


at least by the traditional methods currently in use. 14 Even the 
defense component of total demand is not likely to be reduced by any¬ 
thing approaching the decline in expenditures on Vietnam. 

According to DOD estimates, the cost of the Vietnam War is declin¬ 
ing in the first year of withdrawal (July 1969 to July 1970) by $11.4 
billion—from $28.9 billion to $17.5 billion.1^ Yet the estimated 
savings on total defense expenditure recently mentioned by the 
President was around $5 billion. Clearly a substantial part of the 
savings on Vietnam are being diverted to other defense programs. 

Some programs financed under a Vietnam label are simply being 
switched back to a non-Vietnam funding category. 16 Other non-Vietnam 
programs deferred because of Vietnam are being given the green light 
as the size of the Vietnam program shrinks. While the new programs may 
have much smaller direct balance of payments impacts than the Vietnam 
programs they replace, they will have equally or more serious infla¬ 
tionary impacts on aggregate demand, which is what we are now discuss¬ 
ing. 


Thus the reduction in U.S. defense expenditure "for Vietnam" by 
no means assures an early reduction in imports resulting from excess 
aggregate inflationary deterioration of U.S. competitiveness. More¬ 
over, the impact of changes in the size and character of the defense 
program itself is now only one component, and not necessarily the 
largest, in the overall problem of inflation. Even if the contribution 
of defense spending to inflation could now be greatly reduced, this 
would not of itself assure an early solution of the problem. 

Despite the fact that real GNP and industrial production 
remained about level from the first quarter of 1969 to the first 


■^These methods, which try to eliminate excess demand by cutting back 
production, reduce supply almost as much as demand, and are therefore 
relatively inefficient in the removal of the excess of demand over 
supply. What are needed are imaginative ways of increasing supply 
.relative to demand and of reducing demand without reducing supply. 
Difficult as this is, there may be ways of accomplishing it, but they 
do require substantial institutional innovation. 

"^Melvin R. Laird, p. 108. 

16,, 0f resources currently used in Vietnam, $10 billion would be requir¬ 
ed in other military uses in peacetime." See Cabinet Coordinating Com¬ 
mittee on Economic Planning for the End of Vietnam Hostilities, 

"Report to the President," in Economic Report of the President Trans¬ 
mitted to the Congress January, 1969 (Washington: Government Printing 
Office, 1969), pp. 181-211, especially p. 193. 


/ 


397 





ACDA/E-156 


quarter of 1970, wholesale prices rose during this period by 45 per¬ 
cent and consumer prices by 6 percent. The attempt to stop inflation 
by restraining growth has so far succeeded mainly in stopping growth. 

Moreover, average quarterly overseas defense expenditures 
(worldwide) during the first half of calendar year 1970 show no 
appreciable change from the quarterly level of $1212 million which 
prevailed in 1969. Presumably the rise in costs has more or less 
offset the savings from cuts in troop strength—casting some doubt on 
the realism of the DOD projection of sharply reduced total Vietnam 
defense expenditures by mid-1970. 

However, if the withdrawal continues, it must sooner or later 
result in tangible savings, with corresponding benefits for the 
balance of payments—unless offset by further deterioration in 
trade, capital movements, or transfers.17 The general influence 
should, at least, be favorable, and conducive to a weakening of 
balance of payments contraints on the adoption of dynamic postwar 
adjustment policies, such as will be required for full employment 
and rapid growth. Thus the balance of payments effects of ending 
the Vietnam War should contribute to the solution of our domestic 
as well as our international economic problems. 


Some aid increases may be essential to prevent a dangerous rise in 
inflationary pressure as Vietnam’s dollar receipts from U.S. defense 
expenditures decline. 


398 



ACDA/E-156 


1HE IMPACT OF THE DEFENSE INDUSTRY 
‘ ON THE STRUCTURE OF THE 
AMERICAN ECONOMY 


by 

Kenneth E. Boulding 


One of the most fundamental and yet most difficult questions 
regarding the defense industry is that of its impact on what might be 
called the "relative structure of the economy," that is, on the rel¬ 
ative proportions of the various parts and components of the economic 
system. We can pose the question crudely by saying "What goes down 
when defense spending goes up, and what goes up when defense spending 
goes down? 5. If the proportion of the economy occupied by the defense 
industry increases by 1 percent, there must be a decrease totaling 1 
percent in the remainder of the economy, provided the "economy" 
includes unemployment. This is the heart of the problem of adjustment, 
whether the adjustment is up or down. 

The problem of measuring these adjustments, however, is extremely 
difficult, partly because the relationships may not be stable in them¬ 
selves, and partly because movements in the structure of the economy 
are masked over time by certain long-run trends. Under these circum¬ 
stances, any elaborate statistical techniques which assume that the 
relationships are constant are clearly worthless. The most that 
empirical study can do is to be suggestive of certain rather large 
changes. 

When we are considering the proportional structure of the 
economy, the first question that must be answered is "What is the 
measure of the total economy; what, in other words is 100 percent?" 

This question is by no means easy to answer, and any answer we give 
will be in part arbitrary. The Gross National Product, or indeed any 
of its smaller components, is unsuitable as a measure of the total 
economy, simply because it fluctuates because of fluctuating unemploy¬ 
ment. What we need here is clearly some measure of the capacity of 
the economy which might be called the "Gross Capacity Product," or 
the GCP. This is what the product would have been if there had been 
no involuntary unemployment. This is equal to the Gross National 
Product, plus what might be called Unrealized Product, that is, the 
product which was not produced because some of the work force was 


399 


i 


f 


ACDA/E-156 


unemployed. The simplest measure of the Gross Capacity Product is 
that shown in Equation 1, where GCP is the Gross Capacity Product, GNP, 
the Gross National Product, and u is the percentage of the labor 
force unemployed, as recorded in the national accounts. 

GCP = GNP x - — I: —— (1) 

100 - u 7 

There are significant objections to this formula which work, 
however, in opposite directions. The first is that it assumes that 
Capacity Product is reached when unemployment is zero. This is un¬ 
realistic, as even in the most active labor market there are always 
people passing between jobs, or who are temporarily incapacitated. 

One to two percent of unemployment is perhaps the lowest that any 
society can hope to achieve. Thus, the Gross Capacity Product, as 
measured by Equation (1), would be too large. An additional reason 
for supposing that Equation (1) will overestimate the Gross Capacity 
Product is that it assumes in effect that the productivity of the un¬ 
employed, if they were employed, would be the same as the productivity 
of the presently employed labor force. However, the unemployed tend to 
be less productive, potentially, than the employed, so that this again 
would lead to an overestimate of the Gross Capacity Product. On the 
other hand, the official unemployment figure almost always under¬ 
estimates the amount of unused labor force which might be available, 
mainly because it does not take adequate account of the partially 
employed, who may sometimes represent an unused capacity of the same 
order of magnitude as the unused capacity of the fully employed. There 
is a tricky problem here also of the definition of the labor force. 
Unemployment is defined as the difference between the total labor force 
and the labor force actually employed in productive activity. The total 
labor force itself, however, is somewhat elastic, especially in times of 
stress; for instance, in wartime when people ordinarily not in the 
labor force, like housewives and retired people, come back into it. 
Unfortunately, making these corrections in detail is beyond the scope of 
this study, and as the corrections do in part offset one another, we 
will simply assume that Equation (1) will give a reasonable estimate 
of the Gross Capacity Product. 

Another possible adjustment which could be made is that the 
military budget, which defines the defense industry in the national 
accounts, understates the real size of the defense industry because of 
the fact that conscription produces a military labor force at remuner¬ 
ation considerably less than what would be required in a free market 
with voluntary enlistments. The additional expenditure which would be 
required under these circumstances has been variously estimated, but 


400 



ACDA/E-156 


the order of magnitude seems to be between five and ten billion 
dollars, which really should be added to the defense industry. This 
would then represent the fact that the draft is, in effect, taxation- 
in-kind of young men, a form of taxation which does not get into the 
national accounts. Because of the difficulty of estimating this 
quantity, however, we have not included it in the analysis, especially 
as it seems to be no more than one percent of the Gross Capacity Pro¬ 
duct. In assessing the impact of the defense industry on the propor¬ 
tions of the American economy then, we will use the Gross Capacity 
Product, as it has been defined above, as our one hundred percent, 
i.e., as our measure of the total economy, A more accurate measure, 
of course, would be desirable, but it is very doubtful whether it 
would change the overall picture substantially.^ 

Let us begin then by looking at what has happened to the propor¬ 
tional structure of the American economy in the forty years from 1929 
to 1969, as shown in Table 2. The two years have a good deal of 
comparability as the level of unemployment was approximately the same 
(about 3 percent). The first part of Table 2, shows that the most 
striking change has been the increase in National Defense, from 0.6 
percent of the Gross Capacity Product to 8.2 percent. There has also 
been a substantial rise in what might be called Civilian Government, 
from 7.4 percent to 14.1 percent, most cf this actually being concen¬ 
trated in state and local government. 

When we ask now what has gone down in response to the rise of 
the proportion going into government, we see there is a very small 
decline in Gross Private Domestic Investment, from 15.2 percent to 
14.5 percent, but the major impact of the rise of government has been 
the decline in the proportion of the Gross Capacity Product contri¬ 
buted by Personal Consumption Expenditures, which has fallen 
dramatically, from 72.6 percent to 59.8 percent over the forty years. 

It is clear that the main "bite” of the defense industry has come out 
of the hides of private households, even though in terms of welfare 
this may be partly offset by an increase in public goods. Net Exports 
of Goods and Services have declined considerably between the two years. 
This is, however, a peculiarity of the year 1969, perhaps as a result 
of the squeeze on the dollar, and, in fact, Net Exports have exhibited 
very little trend over the years. They average 0.7 percent of the GCP 
for the eleven years 1958-1969. 


*j 

A comparison of our measure of GCP with some other is shown in 
Table 1. 


401 



Alternative Measures*of Potential GNP 
(billions of current dollars) 


ACDA/E-156 


I to 














- 

• 

' 4-4 

{2 *H 







X 













vO 

1 O 

CD 

rH 


42 

1 



c 












PH 

n- 

*H 5-4 

50 <J 

cd 


4-4 

CD 

✓~s 


CD 

00 

X 

vO 

CM 

x 

rH 

m 

Nt 

O 

CM 

00 

s 

l 

4-> O CO 


CJ 


o 

42 

vO 


O 











o 

o 

CO 14-4 *H 

CO 

•H 

z. 

CO 


vD 


H 

CM 

O 

00 

00 

os 

rH 

CO 

vO 

o 


00 


n- 

CD co 

*H Oh 

4-4 

X 


CO 

CTv 



CM 

O 


in 

CO 

CM 

o 

00 


m 

CO 

rH 


50 

§ 

- o 

•H 

0 

ev 

50 rH 


<d 

vO 

vO 

m 

m 

m 

m 

in 


<r 



cd 

• 

X G rH 

rH 

CD 

CO 

12 




</> 












Oh 

C h cd 


o 

O 

CO 

•H 

ev 


u 












4-» 


cd h C 

Cd rH 

Ph 

H 

CD 

J-l 

<D 













g 

ev 

•H Cd 

hJ cd 



O 

cd 

O 














CD 


rH <D 

iH 

CD 

< 

50 

CD 

•H 














4-4 

Os 

rH O CD 

CO 4-4 

42 

W 

0 

22 

4-4 














O 

vO 

<D 42 

- t2 

H 

O 

O 


4-1 














Oh 

CTv 

CO S-S 4-4 

(2 CD 



O 

#v 

O 


£ 













rH 

CO <f 

P 4.4 

•N 



4-4 



cd 












14-1 


P G 

4*i O 

a 

(D 

o 

{2 

50 



rH 


I s - 

r^. 

CM 

VO 

m 

rH 

<r 

<r 

<r 

o 

Jo P2 Cd O 

O CX 

p 

42 

CO 

CD 

0 















u 




H 

• 

X 

•H 


CO 

m 

CM 

o 

vO 

o 

CM 

00 

00 

c-*. 

00 

CO 

<D 

cd 

X G CO 

CO 

O 


p 

•H 

4-4 



CM 

o 

00 

m 

<± 

rH 

Os 

00 

m 

<r 

<f 

4-» 

0 

G *H X 

« 5 




CO 

0 


G 

vO 

vo 

m 

m 

m 

m 

<t 


<r 


<r 

cd 

O 

cd cd c 

• 

» 

CD 

CD 

•H 



<j> 











B 40 

4-4 CD 

X 

S 


CD 

O 

o 















CD 

4 C P 

CD CO 


co 

CO 

Ph 

Ph 


o 












4-1 

pH 

a *h a) 

*H *H 

M 

rH 

















CO 

V-/ 

cd cd x 

M-l 

P 



CD 

4-4 














W 


rH B 

*H Ph 

42 

• 

• 

42 

G 















rH 

PQ CO 

4-4 

4-4 

Oh 

CO 

4-4 

CD 










- 




<D 


O CD 

(2 CD 

U 


u 


6 














> 

• 

4-4 4-1 

CD O 

< 

<N 

CD 

4-1 

0 


o 













o 

42 eg 

X OJ 



CO 

O 

o 


*H 

vO 


Os 


00 

00 

CO 

vO 

CO 

n- 

o 

4-1 

z 

X B 

*H 42 

CD 

o 

•H 


CD 


6 












cd 


X CD *H 


CD 

r«*. 

> 

4-> 

> 


cd 

o 

00 

vO 

vO 

vO 


m 

Os 

<r 


CO 

C 


CD Vh 4-4 

(0 

CO 

av 

X 

M 

O 


g 

CM 

o\ 

n- 

m 

CO 

i—i 

Os 

r^* 

vO 


CO 

O 

M 

D H CD 

CD ^ 


rH 


O 

CJ 


& 

vO 

m 

m 

m 

m 

m 



<r 

-d- 

<r 

CD 

rJ 

o P a) 

•H f 1 




o 



<o- 











4-1 


Oh cr 

U /“N 

• 

e\ 

a 

CD 















rH 

<D 

B CD CD 

cd 

(D 

0 

•H 

P2 

• • 














< 

g 

O O 42 

CO 

4-4 

o 

B 


0 
















a 4J 

1 

cd 

4-4 

o 

O 

o 














g 

rH 

0 

CD 

u 

1-4 

{2 


4-4 














<3 

O 

<D CD {2 

S3 


o 

O 

B 

50 


0) 













> 

P CD H 

4-4 

IS 

a 

o 

a 


u 














CD 42 


12 


w 

12 

•H 


cd 













^V 

£ CD 

CM 

<D 

• 


O 

42 


4-4 

o 

i-". 

m 

CNl 


m 

m 

00 

rH 

00 


rH 

CO 

CD CJ 

• CO 

B 

13 

M-H 

a 

CO 


CO 

• 











rH 

cj 

CO > (2 

4-» O 



O 

w 

cd 



CTv 

vO 

in 

m 

-d- 

CO 

<1- 

00 

CO 

vO 

CM 

<D 

*H 

CD Cd CD 

CD • 

O 

• 



13 



rH 

ON 

i"'. 

m 

co 

rH 

o 


vO 

<r 

CO 

CO 

4-4 

O 42 U 

44 O 

rH 


rH 

vO 



X 

VO 

m 

m 

m 

uo 

m 

<T 



<r 


CO 

CO 

0 CD 

H 

Oh 

•H 

v£> 



cd 

</> 











P 

*H 

CO x mh 

cd + 

B 


a 

o 

<D 


CD 












pH 

4-4 

Cd H 44 

B 

CD 

• • 

0 

rH 

(D 


4-J 













cd 

CD 0 *H 

rH 

a 


p 


4-» 


CO 












4-4 

4-4 

BOX 

U 1_1 

p 


o 


4-4 














u 

CO 

£ 

o C 


O 

o 

M 

•H 














<D 


U CD 

42 

CD 

>■< 


cd 

£ 














40 

XI 

•H 42 X 

cd ii 

42 


CD 

P 

§ 














o 

0 

BOH 

rH 

4-4 


42 

0 

o 














ol 

cd 

Cd «H 

PH 


55 

4-4 

cd 

CJ 


4-1 














f2 42 

CD 

CO 

a 


X 



O 












• 

CO 

>% ^ • 

42 

•H 


Jn 


o 


P 












pi 

o 

X rH 

•M •• 



42 

r\ 

•H 


X 













•H 

Oh CD 

cd 

22 



0 

B 


O 












X 

0 

x S > 

C2 rH 


4-» 

X 

o 

o 


5-1 












g 

o 

0 O CD 

•H P 

X 

•H 

CD 

•H 

f2 


o< 












cd 

0 

Cd rH 

0 

0 

o 

Oh 

CO 

O 















o 

K-4 

CD H 

cd 

a) 

O 

CO 

CJ 


>s 












4<5 

a 

<D O 4-4 

U O 


o 

rH 

(D 

P3 


4-> 

OS 

av 

in 

00 

vO 

vO 

n* 

vO 

00 

CO 

CM 

a 

w 

4-4 (2 

P 4-1 

n 

co 

(D 

CO 



•H 











• 

cd 


Cd rH CD 

4-4 

Ph 

o 

> 


4-4 


CJ 



rH 


Os 

CO 

o 

vO 

O 

CO 

vO 

rH 

4-4 

4-4 CD B 

a cd 


u 

(D 

X 

0 


cd 

<1- 

Os 

00 

m 

CM 

rH 

o 

r^. 


vO 

in 

PO 

O 

CO > 

P 42 

O 

PM 

X 

a 

•H 

• 

o 

vO 

m 

m 

m 

m 

m 

in 

'd- 

>d- 

<d- 

<* 



0 ) o 

H 4-4 


CM 

O 

X 

cd 

<s> 











• 

£ 

>N rH rH 

4-4 

H 

M-l 

CO 


X 

O 

cj 













a) 

x a 

CO 

cd 

o 

Cd 

n 


rH 

CO 













•H 

Cd CD B 

42 

P 


£ 

co 

CD 

1 













> 

CD 42 CD 

50 

4-4 



CO 

42 

rH 

CO 












(D 

a> 

4-1 4-4 {2 

Cd X 

a 

0 

CO 

CD 

4-4 

o 

o 












rH 

p2 

CO 0 

rH CD 

cd 

o 

CD 

U 


rH 

O 












G 


CD 

4-4 


0 

•H 

50 <D 


CJ 












cd 

CD 

CD 4-» CD 

CD Cd 

CD 

O 

U 

O 

5-4 

• 













4-» 

42 

42 cd 42 

42 U 

42 

O 

CD 

O 

O 

O- 













CO 

H 

H B H 

4-» CD 

4-4 

w 

CO 

CJ 

4H 

Oh 


• • 


m 

<r 

X 

CM 

rH 

o 

os 

00 

n- 

vO 

X 

w 

p^ 

vO 

VO 

VO 

vO 

vO 

VO 

in 

in 

in 

X 

X 

22 

Os 

Os 

o 

av 

ON 

os 

os 

av 

ON 

Os 

av 

o 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

rH 

CO 


402 













ACDA/E-156 


TABLE 2 

Composition of the Gross Capacity Product, 1929 and 1969 
(figures as a percentage of the Gross Capacity Product) 


1929_1969_Change 


Gross National Product 

97.0% 

96.8% 

i 

o 

• 

ro 

Unrealized Product 

3.0 

3.2 

+ 0.2 

National Defense 

0.6 

8.2 

+ 7.6 

Civilian Government Purchases 




Federal 

0.6 

2.4 

+ 1.8 

State and Local 

6.8 

11.7 

+ 4.9 

Total 

7.4 

14.1 

+ 6.7 

Total Government 

8.0 

22.3 

+14.3 

Gross Private Domestic Investment 

15.2 

14.5 

- 0.7 

Personal Consumption Expenditures 

72.6 

59.8 

-12.8 

Net Exports of Goods and Services 

1.1 

0.2 

- 0.9 

SOURCE: Computed from data in Economic 

Report 

of the President 

Trans- 

mitted to the Congress,February 

, 1970 

(Washington: Government 


lllllwCU LU LUC uUUfiLCOD) 

Printing Office, 1970). 


403 








ACDA/E-156 


Table 3 shows the breakdown of Personal Consumption Expenditures. 
Durable Goods, have actually shown a slight increase, mainly due to 
Automobiles. It is actually a little surprising that in these forty 
years Automobiles have not increased more. The main decline is in Non- 
Durable Goods, especially in Food, Clothing and Shoes, which account 
for almost all the decline in Personal Consumption Expenditures, with 
the exception of a small decline in personal services, especially 
housing. These figures require careful interpretation. To a consider¬ 
able extent the change in the structure of Personal Consumption Expen¬ 
ditures reflects more the rise in per capita incomes, than it does 
distortion due specifically to the expansion of government. What we 
are seeing here is, in part, a simple application of Engel’s Law, that 
the proportion of income spent on necessities declines as income 
rises. If it had not been for the expansion of government, and 
especially of the defense industry (that is, if private consumption 
expenditure had been at the proportionate level of 1929), the resources 
released by the relative decline in Food and Clothing expenditures 
unquestionably would have been employed in Services, and perhaps even 
in Durables and other Non-Durables. Thus the decline in the propor¬ 
tion of the Gross Capacity Product devoted to Food and Clothing does 
not necessarily mean that we are less well fed and clad than we were 
in 1929. It may mean simply that we are generally richer. 

Table 4 compares the composition of Gross Private Domestic Invest¬ 
ment between 1929 and 1969. The astonishing thing here is how little 
change there is between the two years. The small decline in Total 
Gross Private Domestic Investment, from 15.2 percent to 14.4 percent 
of the Gross Capacity Product, is hardly significant. Even the com¬ 
ponents have been astonishingly stable over the forty years. Pro¬ 
ducers’ Durable Equipment has gone up a bit, Non-Residential Structures 
down a bit, but nothing very striking has happened to the general 
structure of investment. Even the decline in the agricultural sector 
of the economy is not much reflected in the structure of investment 
because the farm sector is investing more in proportion to its share 
of the GNP than it did in 1929. 

Table 5 now shows the changes in the distribution of the 
National Product between 1929 and 1969. The most striking phenomenon 
here is the rise in compensation of employees from 48.1 percent to 
58.6 percent of the Gross Capacity Product, compensated by a decline 
in Business and Professional Income, Income of Farm Proprietors and 
the Rental Income of Persons, and even a small decline in Net Interest. 
Corporate Profits have changed very little as a proportion of the Gross 
Capacity Product over these forty years. All these figures together 
suggest a trend towards a corporatization of the economy in this 
period. The decline in the Income of Farm Proprietors, of course, 


404 


ACDA/E-156 


TABLE 3 

Components of Personal Consumption Expenditures, 1929 and 1969 
Igures as a percentage of the Gross Capacity Product) 3 



1929 

1969 

fhan op 

Durable Goods 

Automobiles and Parts 

3.0% 

4.2% 

+ 1.2% 

furniture and Household Equipment 

4.5 

3.7 

- 0.8 

Other 

1.1 

1.4 

+ 0.3 

Total 

8.7 

9.3 

+ 0.6 

Non-Durable Goods 

Food, Excluding Alcoholic Beverages 

18.3 

12.5 

- 5.8 

Clothing and Shoes 

8.8 

5.2 

- 3.6 

Food and Clothing (total) 

27.1 

17.7 

- 9.4 

Gas and Oil 

1.7 

2.2 

+ 0.5 

Other 

6.6 

5.5 

- 1.1 

Total 

35.4 

25.3 

-10.1 

Services 

Hous ing 

10.8 

8.7 

- 2.1 

Household Operation 

3.8 

3.5 

- 0.3 

Transportation 

2.4 

1.8 

- 0.6 

Other 

11.5 

11.2 

- 0.3 

Total 

28.5 

25.2 

- 3.3 

Total Personal Consumption Expenditures 

72.6 

59.8 

-12.8 


Rounded detail may not add to totals. 

SOURCE: Computed from data in the Economic Report of the President 
Transmitted to the Congress, February, 1970 (Washington: 
Government Printing Office, 1970). 


405 
















ACDA/E-156 


TABLE A 

Components of Gross Private Domestic Investment, 1929 and 1969 
(figures as a percentage of the Gross Capacity Product) 



1929 

1969 

Change 

Fixed Investment 

Producers Durable Equipment 

5.3% 

. 6.8% 

+ 1.5% 

Non-Residential Structures 

4.7 

3.5 

- 1.2 

Residential Structures 

3.7 

3.3 

- 0.4 

Total 

13.6 

13.6 

0.0 

Fixed Investment 

Farm 

1.0 

0.6 

- 0.4 

Non-Farm 

12.7 

13.0 

+ 0.3 

Change in Business Inventories 

Total Non-Farm 

1.7 

0.8 

- 0.9 

Total Farm 

-0.1 

o.o b 

,+ 0.1 

Total 

1.6 

0.8 

- 0.8 

Total Gross Private Domestic Investment 

15.2 

14.4 

- 0.8 


O 

Rounded detail may not add to totals. 
^Less than 0.05 percent 


SOURCE: Computed from data in the Economic Report of the President 
Transmitted to the Congress. February. 1970 (Washington: 
Government Printing Office, 1970). 


406 











ACDA/E-156 


TABLE 5 

Distribution of National Product, 1929 and 1969 
(figures as a percentage of the Gross Capacity Product) 3 



1929 

1969 

Chance 

Compensation of Employees 




Wages and Salaries 

Supplements to Wages and Salaries 
Total 

47.4% 

0.7 

48.1 

52.9% 

5.6 

58.6 

+ 5.5% 
+ 4.9 

+10.5 

Business and Professional Income 

8.5 

5.2 

- 3.3 

Income of Farm Proprietors 

5.8 

1.7 

- 4.1 

Rental Income of Persons 

5.1 

2.2 

- 2.9 

Corporate Profits and Inventory 

Valuation Adjustment 

9.9 

9.2 

- 0.7 

Net Interest 

4.4 

3.2 

- 1.2 

Total National Income 

81.7 

80.1 

- 1.6 

Business Transfer Payments 

0.6 

0.4 

- 0.2 

Indirect Business Taxes 

6.6 

9.0 

+ 2.4 

Subsidies less Current Surplus of 
Government Enterprises 

-0.1 

0.1 

+ 0.2 

Statistical Discrepancy 

0.7 

-0.6 

- 1.3 

Net National Product 

89.6 

88.7 

- 0.9 

Capital Consumption Allowance 

7.4 

8.1 

+ 0.7 

Gross National Product 

97.0 

96.8 

- 0.2 

Unrealized Product 

3.0 

3.2 

+ 0.2 

Gross Capacity Product 

100.0 

100.0 

0.0 


Rounded detail may not add to totals. 

SOURCE: Computed from data in the Economic Report of the President 

Transmitted to the Congress, February, 1970 (Washington: 
Government Printing Office, 1970). 


407 



















ACDA/E-156 


represents a decline in agriculture as a proportion of the Gross 
National Product, simply because of its remarkably increased produc¬ 
tivity. The decline in Business and Professional Income is a little 
surprising as there has unquestionably been a rise in the professions 
in this period. However, this is evidently more than compensated by 
a decline in unincorporated business, reflecting again the corporati¬ 
zation of the economy. The decline in the Rental Income of Persons, 
likewise, reflects increased corporatization of the housing industry. 
This is a residual figure which does not perhaps have very much 
significance. 

The decline in the proportion of Gloss Capacity Product going to 
Net Interest is a little surprising, especially in the light of rising 
interest rates in the 1960’s. However, interest rates were also high in 
the late 1920's. The proportion of Net Interest in the Gross Capacity 
Product constitutes an interesting history. Under the impact of the 
great deflation, it rose to 6.1 percent in 1932, then under the impact 
of the inflation fell steadily to 0.7 percent by 1946. It is remark¬ 
able, indeed, that all the expansion of government debt from 1929 to 
1969 failed to halt the decline in the proportion of Net Interest, 
which fell to 0.7 percent by 1946 and remained there until 1953. Then 
the combination of rising debt and rising interest rates brought about 
a steady rise in this proportion, to 3.2 percent in 1969. 

The national accounts' concept of Personal Income is derived from 
National Income by a rather miscellaneous collection of additions and 
subtractions most of which are not of very much interest for the 
purposes of this study. However, some of the items are interesting 
and are shown in Table 6. First the breakdown of Personal Income by 
sources is shown. We see an astonishing stability in the proportion 
of income derived from Wage and Salary Disbursements in different seg¬ 
ments of the private economy, a little decline in Distributive Indus¬ 
tries, and, of course, a substantial rise in Government. The relative 
decline in Proprietors' Income and in Rental Income has already been 
noted. A very interesting item is Dividends, which is about halved as 
a percentage of the Gross Capacity Product in this forty years, sug¬ 
gesting again the corporatization of the American economy, with a much 
larger proportion of profits plowed back into the corporations. 

Personal Interest Income has declined proportionally a little less 
than Net Interest, but not much. A striking phenomenon in this forty 
years is the rise of Transfer Payments. Social Security, for in¬ 
stance, was not really on the scene at all in 1929 and accounts for 
about 3.4 percent of Gross Capacity Product in 1969. Other Government 
Transfers, likewise, have gone up dramatically. Veterans Benefits, 


408 


ACDA/E-156 


TABLE 6 

The Composition and Disposition of Personal Income, 1929 and 1969 
(figures as a percentage of the Gross Capacity Product) 3 



1929 

1969 

Change 

Composition 

Wage and Salary Disbursements 

Commodity Producing Industries 

Manufacturing 

15.1% 

16.4% 

+ 1.3% 

A 

Non-Manufacturing 

5.1 

4.2 

- 0.9 

Total 

20.2 

20.5 

+ 0.3 

Distributive Industries 

14.7 

12.4 

- 2.3 

Service Industries 

7.9 

9.1 

+ 1.2 

Government 

4 . 6 

10.8 

+ 6.2 

Total 

47.4 

52.9 

+ 5.5 

Other Labor Income 

0.6 

2.7 

+ 2.1 

Proprietor Income 

Business and Professional 

8.5 

3.5 

- 5.0 

Farm 

5.8 

1.7 

- 4.1 

Total 

14.3 

5.2 

- 9.1 

Rental Income of Persons 

5.1 

2.2 

- 2.9 

Dividends 

5.5 

2.6 

- 2.9 

Personal Interest Income 

Net Interest 

4.4 

3.2 

- 1.2 

Interest Paid by Government and 

2.4 

3.0 

+ 0.6 

Consumers 

Total 

6.8 

6.2 

- 0.6 


409 
















ACDA/E-156 


TABLE 6 (continued) 

_ 1929 _ 1969 _ Change 

Transfer Payments 


Business Transfer Payments 

Government Transfer Payments to Persons 

0.6 

0.4 


0.2 

Old Age,Survivors, Disability, Health 
Insurance 

0.0 

3.4 

-1- 

3.4 

State Unemployed Insurance Benefits 

0.0 

0.2 

+ 

0.2 

Veterans Benefits 

0.6 

0.9 

4- 

0.3 

Other Government Transfers 

0.2 

2.3 

+ 

2.1 

Total 

0.8 

6.4 

+ 

5.6 

• 

Personal Contributions for Social Security 

0.1 

2.7 

+ 

2.6 

Total Personal Income 

80.8 

77.6 


3.2 


Disposition 


Personal Consumption Expenditure 

72.6 

59.8 

-12.8 

Interest Paid by Consumers 

1.5 

1.4 

- 0.1 

Personal Transfers to Foreigners 

0.3 

0.3 

0.0 

Personal Saving 

4.0 

3.9 

- 0.1 

Total - Disposable Personal Income 

78.4 

65.4 

-13.0 

Personal Tax and Non-Tax Payments 

2.4 

12.2 

-1- 9.8 

Total Personal Income 

80.8 

77.6 

- 3.2 


a Rounded detail may not add to totals. 

SOURCE: Computed from data in the Economic Report of the President 
Transmitted to the Congress, February, 1970 (Washington: 
Government Printing Office, 1970). 


410 

















ACDA/E-156 


in spite of the Second World War, have not changed very much. Total 
Government transfer payments to persons have gone up from 0.8 to 6.4 
percent. Business Transfer Payments have experienced a relative decline 
and, as they consist mainly of bad debts, this is an encouraging 
figure, suggesting that perhaps we are becoming more honest or perhaps 
only better policed. The proportional decline in Personal Income over 
the forty years, which is small is mainly accounted for by Personal 
Contributions to Social Security. This, however, is a trick in the 
National Income Accounts and not very significant. 


The drastic decline in Disposable Personal Income is, of course, 
a result of the increased taxes, which have gone up by 9.8 percentage 
points. This increase is a direct consequence of the rise of the de¬ 
fense industry. Indeed, as proportions of GCP, increased taxes and 
defense expenditures are almost equal. Finally, we see the breakdown 
of Disposable Personal Income into Personal Consumption Expenditure, 
Interest Paid by Consumers, Personal Transfers to Foreigners and Per¬ 
sonal Saving. It is interesting that in spite of all the vicissitudes 
of these forty years. Personal Saving as a proportion of the Gross 
Capacity Product has not changed very much, and the decline in Dis¬ 
posable Personal Income has been absorbed almost exactly by a decline 
in Personal Consumption Expenditures. These figures drive home again 
the fact that the main n bite" of the defense industry is out of 
Personal Consumption Expenditures. This proportionate decline in con¬ 
sumption expenditure is almost large enough to account both for the in¬ 
crease in Civilian Government and in the defense industry. 


Outside of this, however, the distribution of income and the 
structure of the sources of personal income have not changed very 
much (that is, the income which originates in the defense industry 
seems to be distributed among the factors in much the same way as 
income originating in the civilian sector), whether we look at it from 
the point of view of the distribution of National Income in Table 5, 
or the sources of Personal Income in Table 6. 

So much for the analysis of the extreme dates. We must now take 
a closer look at the intervening forty years in the following set of 
figures. The overall picture in real terms is shown in Figure 1. The 
top line represents the Gross Capacity Product in real terms, that is, 
in constant prices. The various segments show the division between 
the various items. This figure, incidentally, shows certain possible 
weaknesses in the Gross Capacity Product concept in the sense that it 
is almost certainly exaggerated during the Second World War, say, in 
1944 and 1945 and it may be underestimated in the dip immediately 


411 


BILLIONS 


ACDA/E-156 


FIGURE 1 

Components of U.S. Gross Capacity Product, 1929-1969 

In 1958 Prices 



1930 1940 1950 I960 1970 

YEAR 


SOURCE: Computed from data in Economic Report of the Preside nt 
Transmitted to the Congress, February, 197(jT (Washington: 
Government Printing Office, 1970). 


412 









ACDA/E-156 


afterwards in the late forties. However, the dip in the Gross 
apacity Product during the Great Depression and after the Second 
or War are not wholly surprising, as in the preceding years there 
was a s arp decline in Gross Private Domestic Investment, so it is 
reasona le that the capacity of the economy declined. Even the slower 
rates o growth of capacity in 1954 and 1958 may be associated with the 
ec ine in Gross Private Domestic Investment in. the previous year or 
two. One striking phenomenon in Figure 1 is that real personal Con¬ 
sumption Expenditures declined hardly at all during the Second World 
War. This fact undoubtedly contributes to the Great American Myth— 
that only war gives us full employment and prosperity. 

The proportional structure of the economy is shown much more 
clearly in Figure 2 in which the Gross Capacity is registered as 100 
percent. The figure then shows the distribution of the Gross Capacity 
Product among its various components: 1) Unrealized Product, 2) Fed¬ 
eral Purchases (Excluding National Defense), 3) National Defense, 4) 
State and Local Purchases of Goods and Services, 5) Net Exports, 

6) Gross Private Domestic Investment and 7) Personal Consumption 
Expenditures. Note that in what follows we are referring to a relative 
rise or decline, i.e., the changes of the item as a percent of GCP, not 
the absolute change. Since the GCP rose during most of this period, 
any increase in the absolute quantity of an item may nevertheless be 
reflected as a decrease in its percentage value. 

The Great Depression is dramatized by the ’‘bulge 7 ’ in the 
Unrealized Product between 1929 and 1942, with Unrealized Product 
reaching about 25 percent of the Gross Capacity Product in 1933. The 
relative failure of the New Deal is also dramatized. Unrealized Pro¬ 
duct was still 15 percent of the Gross Capacity Product in 1937 when 
a new depression sent it up almost to the level of early 1932, and it 
had barely decreased to the 1937 level by 1940. We see, incidentally, 
that the recovery was almost wholly due to a recovery in Gross Pri¬ 
vate Domestic Investment, from 1933 to 1937, that the second depres¬ 
sion was mainly the result of a decline in Gross Private Domestic 
Investment, and that Personal Consumption Expenditures, after the 
initial decline, were remarkably stable at about 62 percent in the 
late 1930*s. 

The National Defense component is negligible until 1940, although 
Civilian Government has about the same relative magnitude that it had 
in the 1950 f s. We see very clearly how it was the failure of Gross 
Private Domestic Investment, which was almost zero in 1932, which 
really created the depression and how little the New Deal did to solve 
this problem. If Personal Consumption Expenditures stayed up at the 


413 




PERCENT 


ACDA/E-156 


FIGURE 2 

Unrealized Product and Major Components of GNP as a Percentage of 

Gross Capacity Product 


FEDERAL PURCHASES 



) 

q L—A———i— i —— i ■ u ._ u - ■—■ —i— —^ 

1930 1940 1950 I960 1970 

YEAR 


q L——A—————-I —— i ■ u ._ u - ■—■ —i— —^ 

1930 1940 1950 I960 1970 

YEAR 


SOURCE: Computed from data in Economic Report of the President 

Transmitted to the Congress, February, 1970 (Washington: 
Government Printing Office, 1970). 

( 

414 

i 















ACDA/E-156 


level of 1929, incidentally, the depression would have been much less 
severe. Then from 1940 and 1945 we see the Second World War dramatically 
shown, when the war industry expanded to over 40 percent of the Gross 
Capacity Product by 1943-1944, squeezing all the other components of the 
Gross Capacity Product. The biggest squeeze was on the Unrealized Pro¬ 
duct, which virtually disappeared by 1944 suggesting that because of the 
inadequate employment policies of the 1930’s at least half the war effort 
of the Second World War was able to come from previously unemployed 
resources. The other components, however, were squeezed also. Propor¬ 
tionally Personal Consumption Expenditures were squeezed from more than 
60 percent to almost 50 percent of the Gross Capacity Product even though 
in absolute terms they rose in every year except 1942. Gross Private 
Domestic Investment and Civilian Government were likewise severely 
squeezed both proportionally and absolutely. There is a myth around that 
the Second World War was paid for wholly out of unemployment, but this 
clearly is not the case. There were real sacrifices in other segments 
of the economy. 

We now see the Great Disarmament, of 1945-1946, dramatically express¬ 
ed in a decline of almost 30 percent of the war industry, with very little 
unemployment and a large increase in both Personal Consumption Expendi¬ 
ture and Gross Private Domestic Investment, as well as in Civilian 
Government (Federal, State, and Local). The increase in Net Exports 
represents post-war reconstruction and the Marshall Plan. The figure 
serves to dispose of the myth that the siccess of the Great Disarmament 
was due solely to consumers buying washing machines and automobiles and 
other things for which they had been starved during the war. Actually, 
Personal Consumption Expenditures did not rise to the level of 1929 in 
proportionate terms, and in the main, the resources released from the 
decline of military spending were taken up by Gross Private Domestic 
Investment and Civilian Government, as much as by Personal Consumption 
Expenditures. As the defense industry declined still further in the 
late 1940* s, the slack was mainly taken up by a rise in Civilian Govern¬ 
ment and Gross Private Domestic Investment. Personal Consumption 
Expenditures continued their relative decline during this period. 

Next we see the cold war expansion after 1950, the peak of the 
Korean War in 1953, the rather small Korean disarmament of 1954 (which 
apparently producted a very mild depression) and the long and surprising¬ 
ly stable period from 1955 on, with a slow decline in National Defense 
up till the beginning of the Vietnam expansion in 1965, a decline which 
is almost wholly compensated by an increase in Civilian Government. 
Personal Consumption Expenditures have been astonishingly stable since 
1955, at a little over 60 percent of the Gross Capacity Product. This 
is possibly a reflection of the strong ’’cybernetic" or automatic 
stabilizing effect of the deductible-at-source income tax. The small 


415 


ACDA/E-156 


business cycle in the 1950*s may be noticed, which is mainly a result of 
the fluctuations in Gross Private Domestic Investment. Most of this, 
indeed, is in terms of inventory. (See Figure 5.) The mild stagnation 
of the 1950’s is shown in the rise of Unrealized Product to 6 percent in 
1958 and 1961. The decline in Unrealized Product in the middle 1960’s 
may partly be a result of the tax cut of 1964. 

A very interesting phenomenon is the considerable military cutback 
from 1963 to 1965, when National Defense fell from 8.2 to 7.0 percent 
of the Gross Capacity Product, and unemployment also fell quite sharply, 
from 5.7 to 4.5 percent. This is perhaps the first occasion in American 
history when a reduction in the proportion of the economy devoted to 
National Defense has been accompanied by an actual decline in unemploy¬ 
ment. This is also the period of the ’’Kennedy" tax cut of 1964, which 
may be partly responsible. Nevertheless it is striking that the tax cut 
is not reflected in any increase in the proportion of Personal Consump¬ 
tion Expenditures, which remain virtually unchanged (60.2, 60.4, 60.5) 
in this period. The decline in unemployment is due to the rise in the 
percentage in Civilian Government (11.5 to 12.2) and in Gross Private 
Domestic Investment (14.0 to 15.1) from 1963 to 1965. 

A very striking phenomenon in the accounts, from about 1952 on, is 
the remarkable stability of Total Government, which in the years between 
1952 and 1966 reached its peak in 1953 of 21.8 percent of the Gross 
Capacity Product, reflecting the Korean War, and was at its lowest at 
18.1 percent in ,1956. Even in 1968 it was only 22.1 percent. In this 
period it really seems as if Total Government was virtually stable at a 
little under 21 percent of the Gross Capacity Product and any expansion 
or contraction of National Defense was immediately taken up by a con¬ 
traction or expansion of Civilian Government. Part of this stability may 
be accidental, but some of it must surely be due to the development of 
various automatic and semi-atuomatic control mechanisms in the economy 
since the Second World War. The figure also brings out the smallness 
of the Vietnam operation (surprising in the light of the large political 
reaction) which only expands the National Defense item from 7.0 percent 
of GCP in 1965 to 8.9 in 1968. This relatively small dislocation may 
be attributed, in part, to the fall in unemployment which has continued 
since 1963. 

Another significant concept is that of the Civilian Capacity Pro¬ 
duct, which may be defined as the Gross Capacity Product minus the 
product attributable to the defense industry. 

CCP = GCP - D 

In Figure 3 the National Defense sector of the economy is removed 
altogether, and we look at the distribution of the Civilian Capacity 
Product. This figure brings out rather dramatically the fact that the 


416 


PERCENT 


ACDA/E-156 


FIGURE 3 

Unrealized Product and Major Components of GNP as a Percentage of 

Civilian Capacity Product 

FEDERAL PURCHA SES EXCLUDING 



SOURCE: Computed from data in Economic Report of the President 

Transmitted to the Congress, February, 1970 (Washington: 
Government Printing Office, 1970). 


417 








ACDA/E-156 


"squeeze” in the Second World War, as a result of the expansion of 
National Defense, was much more on Gross Private Domestic Investment 
and on Civilian Government than it was on Personal Consumption Expendi¬ 
tures, which actually rose as a proportion of the Civilian Capacity 
Product. We see also from this figure how Personal Consumption Expendi¬ 
tures in the 1950's and 1960 ? s have been a smaller proportion of the 
Civilian Capacity Product than they were in 1929, reflecting a long-run 
increase both in Gross Private Domestic Investment, but especially 
Civilian Government. This diagram, however, must be interpreted very 
carefully, as it is a rather peculiar concept and it serves to bring 
out certain points about the structure of the civilian economy rather 
than to point up the direct impact of National Defense. 

Figure 4 now shows the components of Personal Consumption Expendi¬ 
tures as percentages of the Gross Capacity Product. The squeeze in 
Food during the war is shown rather dramatically and we see also the 
long decline in the proportion going to Food and Clothing since about 
1947, which is, as we noted earlier, what we should expect with rising 
incomes. The squeeze in Automobiles during the war is shown 
dramatically, but also we see how small this really was in the total 
picture. These national income statistics are a good corrective to 
the illusion that the Second World War was fought mainly by transform¬ 
ing the automobile factories in Detroit. The decline in automobiles 
actually released about 2 percent of the Gross Capacity Product out 
of a total of over 40 percent devoted to the war! 

Figure 5 shows the breakdown of Gross Private Domestic Investment. 

It illustrates how investment almost disappeared in the Great Depression 
and was severely squeezed by the Second World War. The roll of the 
inventory cycle in accentuating the small cyclical swings in durable 
and residential investment is particularly clear. National Defense has 
not offset these fluctuations in Gross Private Domestic Investment since 
the Second World War but, if anything, has rather tended to accentuate 
them. 

Figure 6 shows the distribution of the Product among four major 
types—Durable Goods, Non-Durable Goods, Services and Structures. One 
very striking phenomenon in this figure is the close relationship 
between the proportion of the Gross Capacity Product devoted to Struc¬ 
tures and the Unrealized Product. It would certainly seem as if 
Structures are a key to fluctuations in unemployment. These are, of 
course, closely related also to investment decisions, and they are 
related fairly sharply to National Defense as we see especially in 
1943-1944. Another very striking phenomenon is the decline in the pro- 
protion of Services. This is somewhat unexpected, as with increasing 
per capita real incomes we would normally expect Services to increase. 
Whether this is just a trick of the definition has not been determined. 


418 


PERCENT 


ACDA/E-156 


FIGURE 4 

Personal Consumption Expenditure as a Percentage 

of Gross Capacity Product 



FOOD, EXCLUDING ALCOHOLIC BEVERAGES 



1930 1940 1950 I960 1970 

YEAR 


SOURCE: Computed from data in Economic Report of the President 
Transmitted to the Congress, February, 1970 (Washington 
Government Printing Office, 1970). 


419 















PERCENT 


ACDA/E-156 


100 


i 


FIGURE 

Components of Investment and National Defense 
as a Percentage of Gross Capacity Product 


40 - 



1930 


1940 


1950 

YEAR 


I960 


SOURCE: Computed from data in Economic Report of the President 

Transmitted to the Congress. February» 1970 (Washington: 
Government Printing Office, 1970). 


420 



















PERCENT 


ACDA/E-156 


FIGURE 6 


GNP by Major Type of Product as a Percentage of Gross Capacity Product 



SOURCE: Computed from data in Economic Report of the President 

Transmitted to the Congress, February, 1970 (Washington: 
Government Printing Office, 1970). 


421 










ACDA/E-156 


There has been a somewhat corresponding expansion of Non-Durable Goods, 
which have expanded along with the decline in Services. Another striking 
phenomenon is what looks like a long-term rise in the proportion of the 
economy in Durable Goods. It is not easy to reconcile the categories of 
this breakdown with those, for instance, of consumer goods. Since a 
breakdown by type of product for investment goods or government goods is 
not available, some of these mysteries are not solvable at this time. 

All we can say at the moment is that the impact of the defense industry 
on the type of product produced by the economy is surprisingly obscure, 
although one suspects that a good deal of the increase in the durable 
goods category is a result of the defense industry. Unfortunately, 
however, there is no way to break this down. 

Figure 7 shows the relation of Net National Product and National 
Income to the Gross Capacity Product and the distribution of National 
Income among the functional shares. Line AA is the Gross National 
Product. Subtracting the Capital Consumption Allowance (that is, 
depreciation) we get the Net National Product, which is line BB. Sub¬ 
tracting Indirect Business Taxes, Business Transfer Payments and one 
or two smaller items gives us National Income, which is the line CC. 

This is then divided among the items of Net Interest, Corporate Profits 
and Inventory Valuation Adjustment, Rental Income of Persons, Income 
of Farm Proprietors, Business and Professional Income, Supplements to 
Wages and Salaries, and Wages and Salaries. The aggregate represented 
by the line DD is roughly equivalent to Labor Income, though it includes 
some non-labor income in Business, Professional and Farm Income. 

Several points of interest may be noted about this figure. At 
least since 1945 what might be called the "labor market share" (that 
is. Wages and Salaries, plus Supplements to Wages and Salaries) has 
been a remarkably stable proportion of the Gross Capacity Product. It 
was indeed between 54 and 56 percent from 1952 to 1965. The growth in 
Supplements, reflecting of course a rise in fringe benefits in labor 
contracts, seems to have come mainly out of Wages and Salaries itself. 

We do notice some tendency, however, for the "labor market share" to be 
high when the defense industry is high, for instance, in 1943-1945, in 
1952-1953 and in 1967-1968. This, however, is mainly due to fluctuations 
of unemployment. 

Although Figure 7 shows some interesting phenomena, it can be argued 
that it does not represent the real distribution of income as it is a 
little farfetched to suppose that a certain portion of the Gross Capacity 
Product is "distributed" to unrealized income. The large amount of 
unrealized income in the Great Depression produces a false impression of 
how income was actually distributed. In Figure 8 then we express the 
various components as a proportion of the Gross National Product and in 
Figure 9 as a proportion of the National Income. As a proportion of 


422 




PERCENT 


ACDA/E-156 


FIGURE 7 

Distribution Components of Gross Capacity Product as a Percentage of 

Gross Capacity Product 



UNREALIZED 

PRODUCT 


IND/Ri 


BUSINESS 


NATL. 
INCOME\ 


TRANSFER 

PAYMENTS 


NET 

INTERES 


INCOME* 


BUSINESS Q PROFESSIONAL INCOME 


WAGE SUPPLEMENTS 


1930 


1940 


1950 


I960 


1970 


CAPITAL CONSUMPTION ALLOWANCE 

NNP B 


CORPORATE PRO - '—-— 

V FITS 3 INVENTORY VALUATION 
>-v >^\ ADJUSTMENT 


B SALARIES 


WAGES 


100 


YEAR 


SOURCE: Computed from data in Economic Report of the President 

Transmitted to the Congress„ February, 1970 (Washington: 
Government Printing Office, 1970). 

423 


i 
















ACDA/E-156 




FIGURE 8 

Components of National Income Expressed as a Percentage 

of Gross National Product 



YEAR 


SOURCE: Computed from data in Economic Report of the President 

Transmitted to the Congress. February, 1970 (Washington: 
Government Printing Office, 1970). 


424 











ACDA/E-156 


FIGURE 9. 

Components of National Income and National Defense as a Percentage 

of National Income 



SOURCE: Computed from data in Economic Report of the President 

Transmitted to the Congress, February, 1970 (Washington: 
Government Printing Office, 1970). 


425 














ACDA/E-156 




the Gross National Product, we see that compensation of employees has 
risen slowly from about 50 percent to 60 percent over these forty years 
and that non-labor income has suffered a slow decline. The impact of 
the defense industry, however, is difficult to detect; the impact of the 
Great Depression, of course, is quite noticeable. There is some tendency 
for compensation of employees to rise proportionally during the years 
of heavy war expenditure, but the tendency is small and may easily be 
due to other causes. It is certainly not large enough to account for 
the attitudes of support of the war effort found in the labor movement. 
The general conclusion is that in regard to distribution, the defense 
industry does not make very much difference, simply because whatever 
income is created by it is distributed in much the same way as income 
created in the civilian economy. 

One problem of the statistics of distribution is that there is 
really no good data on distribution after taxes. The national income 
concept excludes indirect business taxes, largely for statistical con¬ 
venience, so that it is not possible, for instance, to take the Net 
National Product, which is perhaps the most significant from the point 
of view of distribution and allocate it among the various sections, 
because we cannot allocate indirect business taxes. The whole income 
distribution segment of the national accounts is in need of thorough 
revision, especially to take account of the incidence of taxation on 
the distribution of income, by both size and functional shares. The 
distribution of income by size (by percentiles, as in the Lorenz curve) 
is of course another matter altogether and we have very incomplete data 
on this. What data we do have suggests that the distribution by size 
is proportionally very constant, that is, as national income rises the 
percentile groups 1 incomes rise in about the same propor Lon so that 
there has not been very much proportional redistribution of income in 
the last generation. The impact of the defense industry on the 
distribution of income by size, however, is largely unknown. There is 
some evidence that incomes are larger in what might be called the 
technologically developed segment of the economy within which the 
defense industry mainly lies, so that it would not be surprising if an 
increase in the defense industry led to a certain proportional reduction 
in those segments of the economy in which poverty is mainly found. The 
impact of the defense industry on poverty, however, is far beyond the 
scope of this paper. 

We have already noted the decline in what might be called "non-labor 
market income*' (that is, Business, Professional and Farm income). This 
has been fairly steady since the Second World War. It reached a maximum 
of 14.7 percent of the Gross Capacity Product in 1945 and had declined 
to 7.1 percent by 1968. This reflects a fairly radical change in an 
important sector of the economy which has received surprisingly little 
attention, mainly perhaps because it has taken place so gradually. 


426 



ACDA/E-156 


One of the most striking phenomena in the post-war period has been 
the stability of Corporate Profits. They disappeared altogether, of 
course, in the Great Depression, largely as a result of the disappearance 
of Gross ^Private Domestic Investment and the impact of deflation. In 
the 1950 s they do exhibit cyclical fluctuation, being low in the years 
of high unemployment. What seems to have happened in the Great 
Depression was a peculiarly slippery dynamic process whereby a decline 
in private investment resulted in a decline in profits, which resulted 
m still further decline in investment, investment decisions being 
closely related to current profit realizations. In the 1950*s this 
process is perceptible, but it never goes very far, and is soon brought 
to an end, as, for instance, in 1954 and 1958. 

A very interesting question which emerges out of this kind of data 
is what would happen to the American economy if the general level of 
private investment were to decline. This could very well happen some¬ 
time in the future. The stability of the American economy in the last 
twenty years has rested mainly on the fact that total gross private 
domestic investment as a proportion of the economy has been remarkably 
stable. This stability, however, may be a little precarious. For 
example, a sudden shock to business confidence, might easily result in 
a sharp decline in Gross Private Domestic Investment which would be 
reflected almost immediately in a decline in profits. This, in turn, 
might produce still further declines in investment similar to the 1929- 
1932 episode. At that time there were no offsets to this decline which 
was accentuated by falling consumption expenditures. This pattern 
added to the growing unemployment which gave us the Great Depression. 

In the light of the skills and tools of economic stabilization which 
have been developed in the last forty years, it is likely that any 
sharp decline in Gross Private Domestic Investment now would be at 
least offset in part by tax reductions, increasing consumption, and 
by increased government expenditure. These offsets, however, might not 
adequately stem the decline in profits, and hence, the drop in gross 

Private Domestic Investment might again be cumulative, as it was from 
1929 to 1932. By comparison with this possible situation, the adjust¬ 
ments to almost any foreseeable decline in the defense sector of the 
economy would seem to be relatively easy, as they would probably not 
occasion any sharp distortion in the distribution of national income 
as between wages and profits. Thus, present techniques of economic 
stabilization are perhaps more adequate to handle various degrees of 
disarmament than they are to manage sharp declines in domestic invest¬ 
ment . 

Another interesting problem is the impact of national defense ex¬ 
penditures on State and Local Government. The impact is masked by the 
secular rise in the proportion of the Gross Capacity Product devoted 
to State and Local Government. This may be in part another "Engel f s 


427 


ACDA/E-156 




effect,” simply because State and Local Governments provide services 
which tend to be ’’superior goods,” that is, which we demand more of as 
income rises. Figure 10 shows the breakdown of the total percentage 
of the Gross Capacity Product spent on National Defense and State and 
Local Government among various categories. The squeeze of the Second 
World War and the Korean War is very evident. The rise in the fifties 
may be part of the trend referred to above, and there does seem to be 
certain plateau in the early sixties at about 10 percent of the total. 



a 


In Figure 11 the various components of State and Local Government 
expenditure are expressed as a proportion of the total State and Local 
Government expenditure, with the National Defense sector plotted at the 
top for comparison. The relative stability of the proportions is 
striking, though it is a little surprising to find a certain squeeze 
on Police and General Control. It is surprising at first sight to find 
that the building of the interstate system in the fifties and sixties 
is so little reflected in the proportion devoted to highways though the 
explanation is probably to be found in the large proportion of Federal 
financing. The long slow rise in the proportion spent in education since 
the middle thirties naturally reflects both rising demand and, at least 
since the early fifties, the rising proportion of the population of 
school age. Figure 12 shows the breakdown of educational expenditure 
as between higher education, public and private, and elementary and 
secondary education, public and private. The rise in higher education, 
of course, is much more dramatic than the rise in elementary and 
secondary education. It is clear that the defense industry tends to 
squeeze State and Local Government in general, but there seems to be 
no clear pattern of how this squeeze is distributed among the various 
components. The problem is compounded by the difficulty of allocating 
Federal grants to state and local government. 

It is not the object of this study to derive exact "coefficients of 
adjustment” which would show exactly how, say, a 1 percent increase in 

national defense would be distributed in increases and decreases total¬ 
ing 1 percent among all the other components of the economy. Nor can 

we predict with any great confidence what the other components would be, 
for instance, if the national defense component were reduced, let us say, 
to 4 percent. There are too many degrees of freedom in a system of this 
kind to permit exact predictions. Nevertheless, the conclusion that the 
main portion of the impact is on Civilian Government seems not unreason¬ 
able, and the experience of the last fifteen years at least suggests 
that Civilian Government stands waiting to absorb almost anything that 
is released from National Defense. 

Defense does not very much affect the distribution of income and it 
seems to have surprisingly little short-run effect on Household Consump¬ 
tion or Gross Private Domestic Investment. In the long-run of course. 


428 



ACDA/E-156 


FIGURE 10 

Components of State and Local Government 



SOURCE: Tax Foundation, Inc., Facts and Figures on Government Finance, 

15th Biennial Edition (New York: The Foundation, 1969), 
p. 130. 


429 












PERCENT _ PERCENT 


ACDA/E-156 


FIGURE 11 

Components of State and Local Government Expenditure 



SOURCE: Tax Foundation, Inc., Facts and Figures on Government Finance, 

15th Biennial Edition (New York: The Foundation, 1969), p. 130. 


430 

















ACDA/E-156 


FIGURE 12 

school Expenditure as a Percentage of Gross Capacity Product 


f0 % 


8 


7' 



HIGHER EDUCATION: NonpubSic, noneducational expenditures 
HIGHER EDUCATION: Nonpubtic, educational expenditures 
HIGHER EDUCATION: Public, noneducational expenditures 
HIGHER EDUCATION* Public, educational expenditures 

ELEMENTARY 8 SECONDARY EDUCATION: Nonpublic 
ELEMENTARY S SECONDARY EDUCATION: Public 



YEAR 


SOURCE: U. S. Bureau of the Census, Statistical Abstract of the United 

States: 1967 (Washington: Government Printing Office, 1967), 
Table 147, p. 109. 


431 
















































ACDA/E-156 


the main "victim” of national defense has been the private civilian 
sector of the economy, particularly as expressed in Household Consump¬ 
tion. This fact suggests also that there may be considerable resilience 
here and that resources released from national defense could easily be 
absorbed by an increase in civilian consumption. This, however, would 
depend on a vigorous tax reduction policy, much more vigorous than that 
pursued in 1964. 

The relation of national defense expenditure to inflation has not 
been discussed, mainly because that relation is not at all clear, 
except in the extreme case of the Second World War, when the relation 
is all too clear. The relation of inflation to unemployment is an 
extremely complex phenomenon about which we know very little. Whether 
the national defense sector of the economy has any peculiar impact 
here we really do not know and it would take a study far beyond the 
dimensions of this one even to begin to find out. The real question is 
whether the pressure to increase commodity prices and money wages is 
peculiarly strong in the national defense sector. It would not be 
surprising if it were, simply because of the absence of barriers to 
price and money wage increases in the sector of the economy in which 
the product is largely disposed of outside the market. It would be 
surprising for instance, if cost-plus contracts were not inflationary. 
This is a question, however, that we must simply lay aside for the 
purposes of this study, important as it is. 

Even though there are many unanswered questions, a clear picture 
does emerge of an economy which is highly flexible, in which many forms 
of adjustment can take place, and which also, at least in the last 
fifteen or twenty years, has had a quite remarkable proportional 
stability, suggesting that there are cybernetic, that is, automatic 
control mechanisms at work in system maintenance. Two general conclu¬ 
sions emerge; one economic and one political. The economic conclusion 
is that the American economy could adjust without too much difficulty 
to disarmament down to almost auy level as it has done in the past. 
Whatever the political and international obstacles to disarmament, the 
economic problem is a very minor element in the total system. The 
political implication is that in an economy with approximately full 
employment scarcity reappears, and that defense has a real cost in 
terms of civilian goods not produced and not enjoyed which will be 
increasingly apparent in the political pressures. 

We could almost look upon the present period as marking the 
psychological end to the Great Depression, in the sense that a majority 
of people in this country now do not remember it at all and were not 
traumatized by it. This means however that there is a much greater 
political awareness of the alternative costs of the defense industry. 
Large numbers of people are becoming aware that an increase in the 
defense industry is a decrease for them and for their interests. The 


432 


ACDA/E-156 


feeling that the defense sector was costless, which grew out of the 
experience of the Great Depression, is now very rapidly passing away. 
Furthermore, now that agriculture is down to 5 percent of the Gross 
National Product, there are no major sources of labor and other re¬ 
sources available for transfer except for the defense sector. In the 
last generation we could expand other segments of the economy easily 
with the resources released from agriculture. Indeed this is precisely 
why we have been able to have this enormous expansion of the defense 
sector without any sharp curtailment of the standard of life. Now, 
however, even a continuation of the remarkable increase in productivity 
in agriculture which we have had for the last generation would not 
release very large labor supplies. We are likely to have increasingly 
pressing demands in the civilian economy, both public and private, and 
the defense industry is the only place out of which these demands can 
be satisfied. We may expect therefore a continued and rising internal 
pressure for reduction of the defense industry, simply in order to 
release resources for other badly needed things. Whether our image of 
the international system and our national role in it will let us do 
this, of course, is another question, but the pressures will be there 
and will be very strong. 


433 


ACDA/E-156 




INTERGOVERNMENTAL RESOURCE TRANSFERS 


Darwin W. Daicoff 


XI,1 INTRODUCTION 

... * • 5 r 

It has been generally assumed that the cessation of the Vietnam 
conflict and a limited agreement on the control of strategic weapons 
systems may result in the release of significant amounts of Federal 
funds for non—defense purposes. When coupled with the anticipated growth 
in national output, the longer-run potential growth in Federal reve¬ 
nues becomes even more substantial. While it is possible that all these 
funds will be used by the Federal government, it is likely that some 
portion of these financial resources will be transferred to state-local 
governments. Thus, while the resources will remain committed to the pub¬ 
lic sector, they will have to be reallocated among levels of government. 

The transfers of resources from the Federal to state and/or local 
governments may have only a limited contribution to make to the short 
run maintenance of full employment following the end of the Vietnam 
hostilities. An optimal public policy aimed at maintaining aggregate 
demand would include monetary and fiscal policy with minimal time lags 
between initiation and economic effects. Because of the accompanying 
time lags, the provision of additional revenues to state-local govern¬ 
ments may be an inappropriate short-run policy tool. 

Deficiencies in the operation of the economy which have their 
origin in structural rigidities may be revealed after the end of the 
conflict. While state-local governments can have an appropriate role 
to perform in correcting these structural problems and while revenue 
transfers would obviously make it easier for these governments to 
finance the expenditures which would be required to overcome these 
rigidities, such transfers are not a necessary prerequisite to this 
public spending. 

The case that can be made for revenue transfers relates to the 


434 





ACDA/E-156 


probable consequences of some kinds of arms control which will perhaps 
involve, but not be restricted to, agreements on strategic weapons 
systems. Excess Federal revenues, which may appropriately be shared 
with other governments, take on real meaning in this setting because 
they assume a size which makes them worthy of serious consideration. 

If military expenditures are curtailed so as to constitute a decreas¬ 
ing portion of the nation 1 2 s output, the well-publicized economic 
growth dividend that can flow to the Federal coffers would become a 
source of funds that may well be shared with state-local governments. 
The following analysis is focused on this longer run situation. 


XI.2 THE ISSUE 

In addition to performing the usual type of adjustment planning. 
President Johnson instructed his Cabinet Coordinating Committee on 
Economic Planning for the End of Vietnam Hostilities to "study and 
evaluate the future direction of Federal financial support to our 
state and local governments."-*- The Committee followed these instruc¬ 
tions by making the following statement in its 1969 report 

Another area of mounting public concern is the financial 
pressure on State and local governments. As a means of re¬ 
ducing the relative importance of the more onerous State and 
local taxes, the Federal Government might adopt some general 
scheme of revenue sharing—such as a return of some personal 
tax revenues to the States (or localities) or a Federal tax 
credit for State income taxes. Some suggested plans would 
cost $5 to $10 billion a year. A specific but more limited 
proposal along these lines would be the establishment of a 
trust fund to finance a generalized Model Cities program. 

Another major proposal that has much support is the es¬ 
tablishment of an Urban Development Bank, which would raise 
its funds in the private capital market. This institution 
would lend to State and local governments at reduced cost, 
thereby relieving the pressure on the market for tax-exempt 


1 Cabinet Coordinating Committee on Economic Planning for the End 
of Vietnam Hostilities, "Report to the President," in Economic Report 
of the President Transmitted to the Congress, January, 1969 (Washington: 
Government Printing Office, 1969), p. 187. 

2 Ibid., p. 206. 


435 







ACDA/E-156 


securities. It would place only a minimal burden on the 
Federal budget since the interest subsidies would be offset, 
at least in part, by increased Treasury receipts from reduced 
use of the tax exemption. But the charge against national 
resources—and therefore against the peace-and-growth dividend— 
would be substantial, depending upon the extent to which the 
Bank finances projects that would not otherwise have been 
undertaken. 

Thus the Committee*s evaluation of intergovernmental resource 
shifts is limited to a listing of some of the major alternatives— 
revenue sharing, tax credits, expanded grants-in-aid, and lending. The 
Committee stopped considerably short of making definite recommendations 
or even offering criteria by which the alternatives could be judged. 

There are many arguments that have been put forth for a transfer 
of resources from the Federal to state-local governments. These range 
from philosophical arguments about the proper nature of fiscal federal¬ 
ism to pragmatic arguments about the financial resources and expenditure 
responsibilities mismatch. 

One of the most telling arguments relates to the potential 
growth in revenues at full-employment. Standard economic analysis calls 
for a Federal fiscal policy of reduced taxes and/or increased expendi¬ 
tures to handle the "full-employment surplus.” While the Kennedy- 
Johnson tax reduction is an example of the former policy, expenditure 
increases are often argued as being preferable. This is particularly 
the case for those who follow Galbraith*s argument regarding private 
affluence and public starvation. j While it may be argued that in¬ 
creased public spending is desirable as an offset to a potential full- 
employment surplus, it is unnecessary that all the increased government 
spending be at the Federal level. This is because some of the areas 
meriting or requiring increased expenditures are those which have 
historically been the responsibility of the state-local governments 
and not of the Federal government. Thus, there is justification for 
a transfer of financial resources to state-local governments. 

Dissatisfaction with state-local government tax sources also 
provides the basis of support for a resource transfer. State and 
local revenue structures are largely composed of property, sales, and 
excise taxes; these tax sources, on the basis of the standard cri¬ 
teria of a good tax, are inferior to the income tax. Thus, according 
to this argument, any transfer system that directly or indirectly would 
lead to increased reliance on the income tax would be desirable. A 


John K. Galbraith, The Affluent Society (Boston: Houghton 
Mifflin, 1960). 


436 




ACDA/E-156 


seconu argument against tne present state-local revenue system relates 
to oisuoitions which these systems force on the geographic allocation 
of resources, fiscal distortions result in a less than optimal spatial 
resource allocation. The inability of some state-local governments to 
provide an adequate level of public services without requiring an 
intolerable level of taxation on the taxpayers in those areas consti¬ 
tutes a third argument some of the low—income states have some of the 
highest taxes and yet provide the lowest levels of service.^ For 
some, it is the equalization of the fiscal capacity of state—local 
governments which constitutes the major advantage of the revenue 
transfer. The well-publicized low responsiveness of state-local 
revenue sources constitutes a fourth area of dissatisfaction. A 
revenue problem is said to exist since the income elasticity of rev¬ 
enue is very low, at least low relative to state-local needs. 5 

Most projections of state-local finances estimate a near balance 
between expendit ures and revenues through 1975. 6 A recent projection 

4 

Selma Mushkin, John Cotton, and Gabrielle Lupo, Functional 
Federalism: Grants-in-Aid and PPB Systems (Washington, D.C.: State- 
Local Finances Project of the George Washington University, 1968), 
Chapter 5. 

While the income elasticities of state and local tax sources 
have been variously estimated, it has been found that they are some¬ 
what greater than unity. As a consequence rising levels of income 
automatically increase the proportion of the nation*s income going to 
state-local governments. Thus to argue that they have a problem is to 
argue that the increases in income should call for still larger portions 
of that income going to state-local governments than automatically 
occurs. 

Selma Mushkin and Gabrielle Lupo, "Is There a Conservative Bias 
in State-Local Sector Expenditure Projections?*' National Tax Journal , 
Vol. XX, No. 3 (September, 1967), pp. 282-291; Tax Foundation, Inc., 
Fiscal Outlook for State and Local Government to 1975 (New York: Tax 
Foundation, 1966). This forecast was updated in Elsie M. Watters, 
"Up-dating State-Local Porjections,*' a paper presented to the National 
Association of Tax Administrators in Baltimore, Maryland, June 10, 

1968; Lawrence R. Kegan and George P. Roniger, "The Outlook for State 
and Local Finance," Fiscal Issues in the Future of Federalism , (New 
York: Committee For Economic Development, Supplementary Paper No. 23, 

1968), pp. 231-283; U.S. Congress, 89th Congress, 2nd Session, U.S. 
Economic Growth To 1975: Potentials and Problems , Joint Committee 
Print, Prepared for the Subcommittee on Economic Progress of the Joint 
Economic Committee (Washington: Government Printing Office, 1966); 
National Planning Association, National Economic Projections to 1975- 
1976. National Economic Projections Series No. 65-2 (Washington: 

National Planning Association, August, 1965). 


437 













ACDA/E-156 


by William Robinson estimated a deficit in 1975 of $S-$16 billion; this 
estimate is consistent with Netzer’s projected $11 billion deficit. 

The major difference among the various projections is often accounted 
for by the assumption made regarding incieases in the quality of state- 
local services. With significant quality improvements, most of the 
studies would show a large deficit. 

By looking at the political process at the state-local level, 
additional arguments supporting a resource transfer can be found. 
State-local governments have had considerable difficulties in their 
attempts to obtain sufficient revenue from their own sources; in part 
this has been due to the reluctance of citizens to approve tax increases 
and/or bond issues. There is ample evidence of the citizens* striking 
out against taxes when they are called on to vote on local issues. The 
publicized departure of many good mayors and governors is in part 
another manifestation of this fiscal problem. Sometimes the departure 
results from defeats at the polls after they have acted to solve state 
or local financial problems, but often the superior elected officials 
choose not to seek reelection because of the frustration associated 
with their position. 


XI.3 THE ALTERNATIVES 

There are a number of alternatives available to the Federal 
government which could be used to accomplish the resource transfer to 
state-local governments. These alternatives involve either Federal 
debt, expenditure, or revenue policy. The Federal government could 
retire its debt. It could spend more money either directly through its 
own activities or indirectly by giving the money away. Finally, it 
could change the tax laws so as to secure less Federal tax revenue. 
These three alternatives are discussed below. 


William Robinson, "Financing State and Local Governments: The 
Outlook for 1975," a paper presented at the Eleventh Annual Forecasting 
Conference, The New York Chapter of the American Statistical Associa¬ 
tion, April 24, 1969; Dick Netzer, "State-Local Finance in the Next 
Decade, 5 ’ U.S. Congress, 90th Congress, 1st Session, Revenue Sharing 
and its Alternatives: What Future for Fiscal Federalism? Vol. Ill: 

Federal, State, Local Fiscal Projections, Joint Committee Print, 
Prepared for the Subcommittee on Fiscal Policy of the Joint Economic 
Committee (Washington: Government Printing Office, July, 1967), pp. 

1332-1366. 

/ 

8 

A Contrary position is expressed in C. Lowell Harriss, Federal 
Revenue Sharing: A New Appraisal , Government Finance Brief, No. 16 
(New York: Tax Foundation, Inc., 1969), pp. 5-6. 


438 








ACDA/E-156 


XI.3.1 Debt Policy 

One use tor the anticipated fiscal dividend would be to retire 
part of the Federal debt. Such a program would ease the pressure in 
the money market and could result in lower interest rates and a real- 
location of investment funds. Lower interest rates should facilitate 
state—local borrowing and thus improve the immediate ability of state- 
local governments to make public investments.^ In addition, the need 
for state-local expenditures may be reduced if the reallocation of 
investment funds results in private spending of sufficient quantity on 
programs which would have directly involved the state or local govern¬ 
ment. 


XI. 3.2 Expenditure Policy 

An increase in Federal expenditures could result from the Federal 
government assuming responsibility for a larger share, perhaps all, of 
certain expenditures of state-local governments. President Nixon*s 
proposals for welfare reform are examples of this sort of realignment 
of expenditure responsibilities. Others have gone much further in this 
direction. 

An expansion of present grant-in-aid programs could be used to 
transfer additional Federal funds. Dissatisfaction with grants has 
become widespread and the opposition to them has become vocal. This 
dissatisfaction involves a number of facets. At an operational level 
it is argued that 1) the programs are so numerous as to be unnecessarily 
confusing and 2) they continue long after their primary need is passed. 
Many cases of program delay and uncertainty have occurred, excessive 
administrative costs have been required, and, particularly with match¬ 
ing grants, distortions in state-local spending have been observed. At 
a more philosophical level it has been said that too much power is 
exercised by the Federal government through too much control over 
state-local governments and that functional Federalism has developed 
and operates so as to undercut elected s.tate-local officials. 


9 

George Break, Intergovernmental Fiscal Relations in the United 
States (Washington: The Brookings Institution, 1967), pp. 149-150. 

i0 See Governor Nelson A. Rockefeller, remarks delivered at 
the Annual Abraham Lincoln Association Dinner, Springfield, Illinois, 
February 12, 1969. 


439 









ACDA/E-156 


These points argue against making significant amounts of 
additional Federal funds available to the state-local governments 
through expanded grant-in-aid programs. On the other hand, a number 
of arguments have been put forth, including the argument that condi¬ 
tional grants are required to optimize the allocation of resources 
to state-local spending programs with significant external benefits. 

This is not to say that there will not be significant changes in 
present grants. The present system could change in the direction of 
larger and broader functional grants ,12 This has clearly been express¬ 
ed in a message to the Congress in which the President stated : ±J 

Among the first major pieces of legislation I asked 
of Congress was authority to make uniform the requirements 
for participation in many grant-in-aid programs that have 
proliferated in the last five years. If we are granted the 
power to draw these programs together, to group them by 
function—setting far more simple regulations—then states 
and communities will participate more and Congress* original 
purposes will be better served. We need that authority now. 

The most important proposal that would result in a transfer of 
resources to state-local governments through adjustments on the expendi¬ 
ture side of the Federal budget involves unconditional grants of the 
Heller-Pechman type, ^ There has been considerable congressional 
support for this type of revenue sharing for at least ten years—over 
100 such bills were submitted in the 90th Congress. The most important 


^^George Break, pp. 62-106; Selma Mushkin, Functional Federalism , 
pp. 24-30. 

^^For an analysis of the success'with grant consolidation efforts 
see William Robinson, '’Budgeting for Federal-State Programs: Progress 
and Problems, * 1, Tax Policy , Vol. XXXV, No. 11-12 (November-December, 
1968), pp. 8-12. 

i 3 

Presidential Message to the Congress on his Legislative 
Program, October 11, 1969. 

^Walter Heller, New Dimensions of Political Economy (Cambridge: 
Harvard University Press, 1%6); Walter Heller, ,f A Sympathetic Re¬ 
appraisal of Revenue Sharing,*’ in Walter W. Heller and Richard Ruggles, 
et al ,, Revenue Sharing and the. City (Baltimore: The Johns Hopkins 
Press, 1968);and Joseph A. Pechman, Federal Tax Policy (Washington: 

The Brookings Institution, 1966), pp. 207 et seq . 


440 


/ 










ACDA/E-156 


recent;^development regarding revenue sharing is President Nixon*s 
bill* This bill is important not because of its innovative features 
but because it is the first time a President has proposed a specific 
revenue sharing plan. It is not the purpose of this study to analyze 
all the features of the various revenue sharing bills or even to 
provide an analysis of any particular bill. What will be done is to 

present some of the major aspects of the most important portions of 
these bills. 

Perhaps the most important feature of revenue sharing is that 
the funds would be transferred to state-local governments with few or 
no strings. The money would be theirs unconditionally. It is often 
argued that state-local governments will, out of necessity, spend the 
funds wisely. 

The amount to be distributed is a percentage of total taxable 
income reported under the Federal individual income tax. This feature 
allows long-term growth in the grants. Some of the proposals would 
require that the amount to be shared not decline in any year. A 
number of plans call for the percentage to start out rather small and 
to increase to a maximum as large as five percent. The basic alloca¬ 
tion to each state would be made on the basis of the state*s share of 
the nation*s population. Often this basic allocation is adjusted for 
state-local tax effort and measured by taxes as a percentage of per¬ 
sonal income. Sometimes a further allocation is provided to low- 
income states. If per capita grants to states are financed from the 
progressive Federal personal income tax, an equalization of financial 
resources between states occurs; in this sense revenue sharing is 
redistributional. The inclusion of tax effort (because low income 
states are high effort states) and the special allocation to low- 
income states carries this redistribution further. Putting tax effort 
into the allocation formula also has the consequence of encouraging 
the state-local governments to maintain or even increase their tax 
effort and not use the grant as an excuse for tax reduction. 

Determining how much of the money should stay with the state 
government and how much should pass through the state and on to local 
governments ha 3 been one of the major stumbling blocks in the develop¬ 
ment of an acceptable revenue sharing plan. The point at issue 
relates to developing a system which guarantees that a major portion 
of the funds will reach the large cities, in which a great need can be 


15 U.S. Congress, 91st Congress, 1st Session H.R. 13982 (also 
S 2948) introduced September 24, 1969. 


441 



ACDA/E-156 


demonstrated, and yet maintain a satisfactory level of flexibility. 

Some plans have been silent on this matter, others have proposed manda¬ 
tory percentage pass-throughs, and still others have sought to relate 
the pass-through to tax collections, inccme, or population. If a pass¬ 
through requirement is present, it must be decided which local govern¬ 
ment is to receive the funds. In order to concentrate the available 
funds in areas of greatest need and to avoid encouraging governmental 
fragmentation, a lower limit on size of cities or urban counties 
(50,000 population) which would share in the aid is sometimes made 
part of the plan. Eliminating school districts and special authorities 
as recipients is sometimes suggested as a way to avoid fragmentation .U 

XI.3.3 Revenue Policy 

The Federal government has a number of ways to reduce its 
revenues and to transfer the resources which these funds represent to 
state-local governments. A simple way of changing Federal revenue 
involves Federal action but requires that before any transfer occurs 
the state-local governments must act.^ If the Federal government cuts 
its taxes and the state-local governments raise their taxes in like 
amount, the state-local governments could be assured revenue without 
changing the total dollar burden on the private sector. However, since 
state-local tax increases would inevitably involve increases in sales 
and/or property taxes, this policy would result in a deterioration in 
the structure of the over-all tax system. Requiring state-local tax 


Some argue that states are now giving substantial aid to local 
government, including the major cities, and can be counted on to share 
any new money with local governments. This position is strengthened by 
reference to legislative reapportionment resulting from the one man one 
vote decision. (See the Ecker-Racz portion in Vol. II, U.S. Congress, 
Revenue Sharing , pp. 998-1006. 

~^The Administration spokesman who has been closest to the Nixon 
revenue sharing proposal has included in a list of basic principles on 
the topic, the '’Inclusion of all general-purpose local governments, 
regardless of size or location.'* See Murray L. Weidenbaum, **A Progress 
Report on Revenue Sharing, H remarks before the Chemical Forum, Washing¬ 
ton, D.C., May 18, 1970, p. 2. 


It is sometimes proposed that the Federal government give up 
some revenue sources on the grounds that state or local governments 
would then use these sources. The history of the Federal government 
repeal of the electrical energy tax and the reduction of the admissions 
tax, however, indicates that state-local governments cannot be relied 
upon to use the relinquished Federal tax sources. 


442 






ACDA/E-156 


increases before financial resources can be reallocated also has the 

serious disadvantage of putting political pressure on the elected 
state-local officials. 


Partial credits against the Federal personal income tax for income 
taxes paid to state-local governments is one of the leading alternatives 
to unconditional per capita grants. 


For additional revenue to become available with the credit 
device, however, it would be necessary for some state-local governments 
to impose a personal income tax and others to increase rates of exist¬ 
ing income taxes. A tax credit (or source-oriented tax sharing) makes 
no contribution to the equalization of fiscal capacity between states. 
ibis is because a tax credit does not directly increase the amount of 
total public revenues in any state; all that it can do is to reallocate 
public funds between the governments within each state. Another weak¬ 
ness of the credit method is its lack of encouragement for state-local 
governments to maintain tlieir own tax efforts—thus a tax credit may 
lead to a net tax reduction. 

In making its case for tax credits the Advisory Commission on 
Intergovernmental Relations put particular emphasis on 1) enhancing the 
revenue raising capabilities of state-local governments by partially 
shielding them from the full impact of intergovernmental tax compe¬ 
tition, 2) shielding Federal policy-makers from constant pressures for 
increases in the alternative per capita revenue sharing allocations and 
3) improving the quality of the total tax structure by stressing the use 
of income taxes. 


19 

George Break, pp. 152-153. 

2 0 Ibid. , pp. 153. 

21 The Advisory Commission on Intergovernmental Relations has 
recommended a program containing both unconditional revenue sharing and 
partial income tax credits* See testimony of William G. Colman, 
Executive Director, Advisory Commission on Intergovernmental Relations, 
U.S. Congress, 91st Congress, 2nd Session, Intergovernmental Revenue 
Act of 1969 and Related Legislation, Hearings before the Subcommittee 

on Intergovernmental Relations of the Committee on Government Opera¬ 

tions, U. S. Senate on S.2483 and S.2048, Commencing September 22, 1969 
(Washington: Government Printing Office, 1970), pp. 76-109. 


443 









ACDA/E-156 


1 


XI.4 FISCAL POLICY LAGS 

Revenue sharing has been advocated as an aid in the short-term 
adjustment to reduced defense spending. Others have argued that 
various lags preclude a short-run contribution by intergovernmental 
resource transfers. This section examines the evidence on this 
conflict. When most econometric models separately estimate state and 
local expenditures, they generally abstract from Federal payments to 
state-local governments. In the Brookings model state-local govern¬ 
ment expenditures of various kinds are determined on the basis of the 
nation’s income, population, or other national characteristics which 
influence the particular expenditure program.^ i n the state-local 
government expenditure equation, Ando, Brown and Adams use dummy 
variables to allow changes in Federal programs to influence the total 
amount of state-local expenditures for a program that receives 
Federal aid. Thus there is a relationship between the Federal sector 
and the state-local sector, but this relationship is restricted to 
changes in the level of expenditures before and after specific points 
in time—points in time chosen to reflect significant change in 
Federal aid. 

The Federal Reserve—HIT econometric model is one of the few 
which treat state-local government expenditures and taxes as endogenous 
variables, i.e., they are determined within the model and are not 
simply tacked on to it.^3 Federal grants-in-aid to state-local 
governments are employed as independent variables in the separate 
equations used to determine state-local construction expenditures, 
other purchases, compensation of employees, and transfer payments. 

The Thurow model divides state-local expenditures into two parts: 

1) employee compensation and 2) purchases of goods and other services. 
Federal grants are predetermined independent variables in the two 
equations which estimate these expenditures.^^ 


22 

Albert Ando, E. Cary Brown and Earl W. Adams, Jr., ’’Government 
Revenues and Expenditures,” in James S. Duesenberry, et al. (eds.). The 
Brookings Quarterly Econometric Model of the United States (Chicago: 

Rand McNally, 1965), pp. 533-585. 

23 

' Frank de Leeuw and Edward Gramlich, ’’The Federal Reserve-MIT 
Econometric Model,” Federal Reserve Bulletin , Vol. 54, No. 1 (January, 
1968), pp. 11-40; and Edward M. Gramlich, "State and Local Governments 
and Their Budget Constraint,” International Economic Review , Vol, 10, 

No. 2 (June, 1969) pp. 163-182, 

24 

Lester C. Thurow, A Fiscal Policy Model of the United States,” 
Survey of Current Business , Vol. 49, No. 6 (June, 1969), pp. 45-64. 


444 











ACDA/E-156 


Not in the Brookings, the Federal Reserve-MIT, or the Thurow 
models do the variables which determine state and local expenditures 
have a lag which exceeds one quarter. Since the Brookings model 
abstracts from the level of government which finances the expenditure, 
no special knowledge is produced by the model about state—local ex¬ 
penditure lags. For the Federal Reserve-MIT model, where state-local 
governments exist separately, in none of the four equations determining 
state-local expenditures does the Federal grant involve a substantial 
lag. In the compensation of employees and the transfer payments 
equations there is no lag at all. Thus Federal grants in any quarter 
are determinants of these two components of state—local expenditures in 
that quarter, tor the construction and the other purchases equations, 
current quarter and last previous quarter grants are both independent 
variables. The Thurow model contains many independent variables with 
one year lags; the Federal grant variable does not involve a lag at 
all. These econometric models then would not forecast excessive lags 
in economic effect should grants to state-local governments be 
increased. This is inconsistent with the position taken by some 
analysts. 

The Cabinet Coordinating Committee on Economic Planning for the 
End of Vietnam Hostilities has stated:^ 

Decisions on Federal expenditires, as part of the program 
of fiscal adjustment, should be made in light of the promptness 
with which various types of outlays will add to total demand. 

For example, according to our staff studies, some—although 
not all—Federal grant programs to States and localities in¬ 
volve a significant lag between the expenditure of the funds 
by the Federal Government and their translation into additional 
purchases by the recipients. Programs with long lags are not 
ideal for supporting demand during the transition. In con¬ 
trast, other Federal programs generate orders or contracts to 
the private sector which would increase employment and economic 
activity promptly even before expenditures are incurred by the 
Federal Government. 

This position was based on an analysis of the spending patterns of state- 
local governments and on certain estimates of the time-phasing of this 
spending. It is this time-phasing aspect which was an unsolved problem 


^Cabinet Coordinating Committee on Economic Planning for the 
End of Vietnam Hostilities, pp. 196-197. 


445 




ACDA/E-156 


for the Committee. In discussing the timing of the fiscal stimulus of 
various Federal expenditure programs, Schultze argued that increased 
expenditures for direct Federal programs have a more rapid and certain 
effect than an increase in grants. 26 He attributed the slowness at the 
state-local level to 1) the need for matching funds to be approved by 
state legislatures and city councils, 2) limitations of trained person¬ 
nel, and 3) organizational barriers. The Committee and Schultze thus 
conclude that some substantial lags, at least for some grant programs, 
would be present. 

Additional light can be shed on this conflict by looking at the 
economic consequences which can be isolated from grant programs that 
have been used as stabilization devices. 

Friedlaender has concluded that Federal efforts to use highway 
construction expenditures in a countercyclical fashion were not par¬ 
ticularly successful. 1 She placed the blame for this on institutional 
rigidities rather than on any lags in the highway construction program 
itself. It was found that the usual lag between initial approval and 
payment of funds to the states was between one and two years. This lag 
did not necessarily represent the period from the program 1 s conception 
to the beginning of its impact on the private economy; rather it might 
represent the period from project initiation to completion. This is 
because the Bureau of Public Roads reimburses the state only for funds 
that the state has already paid the highway contractor. 

The Accelerated Public Works program is another example of a 
Federal aid program which has been used to help stabilize the economy.^ 
Funds were allocated to Federal departments which then had to approve 
grant applications from local committees for specific projects. These 
funds were obligated (or project approved) very rapidly—the last 


2 6 

“Charles Schultze, "Budget Alternatives After Vietnam," in 
Kermit Gordon (ed.), Agenda for the Nation (Washington: The Brookings 
Institution, 1968), pp, 13-48. 

27 

Ann F. Friedlaender, "The Federal Highway Programs as a Public 
Works Tool," in Albert Ando, E. Cary Brown, and Ann F. Friedlaender 
(eds.), Studies in Economic Stabilization (Washington: The Brookings 
Institution, 1968), pp. 61-116, especially pp. 98-101. 

28 

Ibid. , p. 98. 

29 " 

Data for this analysis was provided by the Bureau of the 
Budget, Executive Office of the President. 


446 






ACDA/E-156 


project was approved only 19 months after the first project had been 
approved. While these two cases may not be convincing, they lend 

support to the position that only minimum lags are present in at least 
some programs. 

The U. S. Arms Control and Disarmament Agency has sponsored a 
recent st\icj^ oa the lags associated with certain Federal expenditure 
programs. The purpose or the study was to provide information regard¬ 
ing the time pattern of the employment impact due to changes in the 
composition of governmental spending, Adams and Spiro utilized a case 
study approach which included an analysis of four Federal expenditure 
programs—1) NASA programs, 2) Urban Mass Transit, 3) Urban Renewal and 
Public Construction and 4) The special "D" Highway Construction Program. 
Since three of these program areas involved state and/or local govern¬ 
ments, valuable information was produced relative to the special nature 
of time lags when there is a state-local responsibility for implementa¬ 
tion rather than a Federal responsibility. 

In some of the programs, administrative or bookkeeping rules and 
procedures have been found to make a considerable difference in the 
measured lags between program components when objective analysis would 
lead one to conclude that there were few or no real differences in the 
actual timing of economic impact. Further it was found that the length 
of time which elapses between initiation of policy and the obligation of 
funds by the government often turns out to be the true culprit causing 
the lengthy lags found in the impact of many government expenditures. 

The lapse of time between the obligation of funds and the eventual 
impact on demand or employment was found to be surprisingly short when 
available capacity existed in the private sector of the economy. Both 
of these lags may be shortened by a conscious attempt on the part of the 
Federal government. Finally, it is recommended that detailed plans for 
particular projects be drawn up, approved, and be added to the authorized 
reserve of projects maintained by most agencies, to give maximum flexi¬ 
bility to any compensatory spending program, where rapid economic impact 
is desired. 


XI.5 FEDERAL GRANTS AND STATE SPENDING 
Formal models of state-local decision-making are just beginning 


3Q Earl W. Adams, Jr. and Michael H. Spiro, "The Timing of the 
Impact of Government Expenditures,* Prepared for U.S. Arms Control and 
Disarmament Agency (Washington: Government Printing Office, ACDA/E-157, 
1970). 


447 



ACDA/E-156 


to appear in the literature of public finance,While models of this 
type are still in the development stage some clues regarding the possible 
reaction of state-local governments to alternative Federal grant programs 
car- be obtained from them. Theoretically it is unclear whether a Federal 
grant for a specific function which requires state matching will in¬ 
crease or decrease total state spending—Gramlich argues that the 
matching grant must increase total state spending while Barlow points 
out it need not, Gramlich and Barlow also disagree about the relative 
effectiveness of unconditional or blocked grants and Federal tax 
reductions in stimulating state and local expenditures. 

On the basis of standard economic analysis, Wilde has concluded 

that it is necessary to know the particular features of a grant program 

as well as the characteristics of the recipient governments before one 
is able to predict whether the grant will stimulate total expenditures 
or will reallocate expenditures between aided and non-aided functions.32 
At this stage in the development of formal models it must be concluded 

that policy relevant conclusions are still some time in the future. In 

the absence of theoretical answers many analysts have turned to empiri¬ 
cal work. 

A considerable number of attempts have been made to isolate the 
influences which account for the variations in expenditures of state- 
local governments. One of the earliest of these was done in 1952 by 
Solomon Fabricant.'^ He used population, income, density, and urbani¬ 
zation as determinants but did not include Federal grants as a variable. 
Since Fabricant a number of studies have employed Federal grants to the 
states and/or state grants to the local governments as determinants of 


J ^Edward M. Gramlich, ’’Alternative Federal Policies for Stimulat¬ 
ing State and Local Expenditures: A Comparison of Their Effects,” 
National Tax Journa l, Vol. XXI, No. 2 (June, 1968), pp. 119-129; and 
Robin Barlow, "A Comment on Alternative Federal Policies for Stimulating 
State and Local Expenditures,” National Tax Journal , Vol. XXII, No. 2 
(June, 1969), pp. 282-285. 

32 

James A. Wilde, ? ‘The Expenditure Effects of Grant-in-Aid 
Programs ” National Tax Journal , Vol. XXI, No. 3 (September, 1968), 
pp. 340-348. 

33 

Solomon Fabricant, The Trend of Governmental Activity in the 
United States Since 1900 (New York: National Bureau of Economic 
Research, 1952). 


448 








ACDA/E-156 


per capita expenditures*' When intergovernmental aid has been used as 
a determinant it has been very important as an explanatory variable. 

The use of intergovernmental aid as an independent variable in 
multiple regression^analysis of state—local expenditures has been sub¬ 
ject to criticism. This criticism centers around 1) the relative 
uniformity of intergovernmental aid, 2) the non-independent nature of 
matching grants, and 3) the fact that thejaid is, at once, part of the 
independent and the dependent variable. These points have led to a 
reluctance to use intergovernmental aid a*< a determinant and to look 
with skepticism at statistical results which employ an aid variable. 

Gramlich has been able to analyze state-local expenditure re¬ 
actions on the basis of the Federal Reserve-MIT econometric model. He 
found that states have a marginal propensity to spend matching grants 
of 1.120. This means that state-local spending changes by 11.2 per¬ 
cent for each ten percent change in grants. Matching grants were thus 
found to stimulate states 1 * spending. Thus, the Gramlich findings 
postulate a sizeable reduction in the aggregate fiscal effort of states 
and localities if the aid program were changed to rely on bloc grants— 
especially in comparison with the present grant program. The most damag 
ing aspect of bloc grants is that they would result in lower expendi¬ 
tures and/or higher taxes as compared to matching grants. Thus on 
purely fiscal grounds, unconditional grants do not appear to be nearly 
as stimulative as the present matching variety of grants. 3 * * * ' 7 


Seymour Sacks and Robert Harris, "The Determinants of State and 
Local Government Expenditures and Intergovernmental Flows of Funds," 
National Tax Journal , Vol. XVII, No. 1 (March, 1964), pp. 75-85; and 
Roy W. Bahl, Jr., and Robert J. Saunders, "Determinants of Changes in 
State and Local Government Expenditure," National Tax Journal , Vol. 

XVIII, No. 1 (March, 1965), pp. 50-57. 

33 Harvey E. Brazer, City Expenditures in the United States (New 
York: National Bureau of Economic Research, Occasional Paper 66, 1959); 
and Jack Osman, "On the Use of Intergovernmental Aid as an Expenditure 
Determinant," National Tax Journa l, Vol. XXI, No. 4 (December, 1968), 
pp. 437-447. 

3 ^Edward M. Gramlich, "State and Local Governments and Their 

Budget Constraint," p. 179. 

3 ^The Administration proposals provide for no "strings" or 

restrictions on the use of the money, however, bee Murray L. Weidenbaum, 

p. 2. 


449 








ACDA/E-156 


XI.6 CONCLUSION 

A very good case can be made for a transfer of resources from 
the Federal to the state-local governments. Such a transfer is rele¬ 
vant today and will be even more appropriate after the Vietnam conflict. 
Such transfers will have additional feasibility after an arms limitation 
agreement. If such a transfer is not accomplished, it will not be 
because of a lack of implementation plans as there are a considerable 
number of alternatives. 

Many influential spokesmen propose that the transfer be accomp¬ 
lished by the simultaneous use of more than one mechanism. The leading 
contenders seem to be 1) a fairly modest increase in present Federal 
grants-in-aid, perhaps including the Federal assumption of a larger 
share of the financial responsibility for specific programs such as 
welfare, 2) a modest beginning of unconditional grants of the Heller- 
Pechman type, and 3) partial tax credits which render the Federal 
individual income tax a substitute for state-local taxes. Grant pro¬ 
grams are on the books and could be expanded fairly easily. An 
Administration bill to begin unconditional grants has reached the 
Congress. Tax credits, because of their influential supporters, have 
more than an outside chance of adoption. 

Unfortunately we know very little about the likely reactions of 
state-local governments to various resource transfer programs. Neither 
theoretical nor empirical analysis has yet provided adequate policy 
answers. Significant short-term lags in achieving an income or employ¬ 
ment effect from grants-in-aid programs are often postulated. A number 
of econometric studies, however, have shown that these lags are, or can 
be, less serious than they are generally imagined. The Adams-Spiro 
study provides evidence that the most significant fiscal policy lag of 
expenditure programs are internal to the Federal government. The 
alternatives which may be employed to secure the chosen level of 
resource transfers will differ in their economic impact. Both because 
the Federal government can influence the speed and the direction of this 
impact and because such influence may be desirable, the Federal govern¬ 
ment could 1) create a ‘ ? shelf of public works 1 ' to be undertaken at the 
national level and provide planning grants to state and local govern¬ 
ments so that they also could undertake additional public works, and 
2) create the legal and administrative machinery which would facilitate 
the resource transfer. This might involve programs such as scheduled 
tax reductions or low levels of revenue sharing which could be 
increased as needed. 


450 


ACDA/E-156 


INDUSTRIAL ADJUSTMENTS TO MILITARY EXPENDITURE 

SHIFTS AND CUTBACKS 

by Murray L. Weidenbaum 


XII.1 INTRODUCTION 

Numerous shifts have taken place in the past two decades in the 
level and composition of military spending in the United States. These 
changes, in turn, have required various adjustments and responses on 
the part of the defense industry. 

XII.1.1 The External Forces 


The largest changes in military spending were the increase in 
Air Force outlays during the period between the Korean and Vietnam 
conflicts, the reverse movement in Army procurements, and the develop¬ 
ment of a substantial military market across service lines as 
establishment-wide functions were activated or expanded (see Table 1). 

Another way of looking at the basic factors affecting the defense 
companies is to examine the changing trends in the product composition 
of military purchases. As shown in Table 2, the major weapon systems— 
notably aircraft, missiles, and electronics—have accounted for over 
forty percent of military procurements from the private sector. This 
is the portion of military buying which is characterized by special¬ 
ized development and production of equipment on specific order. Here 
can be seen the explosive growth of science and technology demonstrat¬ 
ing its effect through rapid creation of successive generations of 
supersonic aircraft, ballistic missiles, and satellites exploring 
outer space. 

The major changes in military product demand to which the weapon 
system suppliers have had to adjust can be inferred from the data in 
Table 2. Aircraft has gone through a cycle of decline and now expan¬ 
sion as well as through a shift in emphasis from strategic bombers 
to tactical fighters and transports. With the completion of much 
of the production of the second generation of the ICBM’s, such as 
Minuteman and Polaris, a substantial decline has occurred in the 
overall missile category. The expansion of the U.S. involvement in 


451 



ACDA/E-156 


w 

h3 

PQ 

<3 

H 










00 


S'? 



x© 





O 

-0- 

r". 

ax 



in 

<r 

O 

00 

04 




m 

• 

• 

• 

• 

! 


<r 

X© 

• 

• 

• 

• 

• 



ax 

o 

in 

o 

CO 

i 


a 

Ox 

o 

CM 

rH 

X© 

a\ 


4-» 

rH 

o 

CM 

CO 




rH 

i—i 

o 

CM 

CO 

CO 



u 


rH 






CM 


rH 






3 








<Tj 








u 
















4J 








7 








3 
















w 

u 


S'? 






O 


o'? 



x© 




x© 

O 

o 

ax 

CM 



ax 

CO 

O 

CO 

o 

*H 


0) 

m 

• 

• 

• 

• 

1 


m 

V© 

• 

• 

* 

• 

• 


6 

ox 

O 

■<r 

rH 


1 


* 

ax 

O 

CM 

oo 

o 

Cx 


•H 

rH 

o 

CM 

CO 

<r 



ax 

rH 

o 

CM 

CM 




M 


<—! 






rH 


rH 






P* 








</> 








>xO 

M r"~ 

t(J OX 

U rH 


S'? 






CM 


S'? 






•H | 

m 

o 

V© 

rH 

co 



OO 

CM 

O 

oo 

O 

CO 

O 


rH r—4 

m 

• 

• 

• 

• 

1 


m 

x© 

• 

• 

• 

• 

• 


*H in 

ax 

o 

rH 

oo 

o 

1 


«* 

ax 

o 

in 

o 

o 

<r 


S ax 

rH 

o 

CO 

CM 

<r 


x© 

rH 

o 

CM 

CO 

■a 



rH 


rH 






rH 


rH 






4-1 








</> 








O CO 
































<U (0 
tiO 0) 
c0 


S'? 






ax 


S'? 






4-> 

<r 

O 


r- 

00 



r^. 

iH 

o 

in 

o 

in 



3 rH 

in 

• 

• 

• 

• 

1 


CM 

x© 

• 

• 

• 

• 

i 


CD <0 

ax 

o 

CO 

CM 

CO 

1 



ax 

o 


rH 


i 


o o 

rH 

o 

CM 

CO 

<r 



CO 

rH 

o 

CM 

CO 




M CO 


rH 






rH 


rH 






Q) -H 

cn ^ 








</> 








#* 

•• X 
a. a 


S'? 






CM 


S'? 






3 3 

CO 

O 

x© 

ax 

x© 



rH 

o 

O 

CO 

CO 

oo 



o <d 

m 

• 

• 

• 

• 

1 


00 

x© 

• 

• 

• 

• 

i 


H U 

ax 

o 

ax 


m 

1 


0* 

ax 

o 

H- 

rH 

CO 

» 


O PQ 

rH 

o 

CM 

CM 

n- 



rH 

rH 

o 

CM 

CO 

<fr 





rH 






CO 


rH 






H <D 

a> o 

a -h 
o > 

4-3 u 








</> 








co a> 


^? 






Ox 


S'? 






3 co 

CM 

O 

rH 

rH 

00 



xD 

ax 

O 

r^. 

CO 

ox 



u 

m 

• 

• 

• 

• 

1 


m 

m 

• 

• 

• 

• 

» 


to 

ax 

o 

x© 

m 

00 

1 


#* 

Ox 

o 

CO 

o 

in 

i 


>. J3 

rH 

o 


CM 

CM 



CO 

rH 

o 

CM 

CO 

<r 



rO 


rH 








rH 






CO 








</> 








to r a 
















•* n 

4-J CO 

0) £ 

^5 <3 


S'? 






ax 


S'? 






V-4 

i—1 

o 

o 

i"- 

CO 



<r 

CO 

o 

00 

ax 

CO 



eg 

m 

• 

• 

• 

<» 

1 


x© 

m 

• 

« 

• 

• 

i 


X 

OX 

o 

00 



1 


*\ 

ax 

o 

-a 

oo 

X© 

i 



rH 

o 

<r 

CM 

CM 



CM 

rH 

o 

CM 

CM 




>X 


rH 






CO 


rH 














<J> 








CO 
















u 
































rH 
















*H 








C0 








s 






to 


3 ^ 






tn 


0) 






rH 


o co 






rH 







CU 


•H *4 






Qi 


.fl 






Cu 


rH Cd 






Cu 


H 






30 

rH r — 1 






3 




/—v 



<D 

C/7 

to 

•H rH 


/—\ 



<u 

C/3 

>x 




- 


O 

a> 

a 

0 O 


S'? 



u 


O 






3 

3 



x-/ 



u 

(U 

3 






0 

CO 

<d 






o 

CO 

cu 



rH 



tn 

3 

00 

rH 44 


'—I 



p4 

3 

00 



c0 

b 

b 


0) 

<3 

3 O 


3 

>x 



0) 

<3 



u 

p 

> 

3 

u 

44 


U 


u 

£3 

> 

u 

44 




o 

M 

•H 

0) 


O 


o 

£ 

aj 


a) 




H 

<3 

S3 

<3 

a 


H 


H 

<3 

525 

<3 

P 



452 


Total (millions $24,197 $25,312 $23,689 $25,584 $29,254 $29,379 $28,796 




TABLE 1 (continued) 


ACDA/E-156 


o 

r". 

ON 


ON 

NO 

ON 


00 

NO 

ON 


r». 

NO 

ON 


NO 

NO 

ON 


m 

VO 

ON 


o 

• 

o 

o 


m cm 


oo 

CM 


o 

CO 


ON 

CM 


BnS 

O 

• 

o 

o 


CO r*. 
• • 

O 00 
oo cm 


oo 

CM 


o 


NO 


o 

o 


o 

CO 


o 

CO 


r- 

CM 


o 

o 

O 


00 

• o 

r-. rH 
CM CO 


o 

CM 


^2 

O 

• 

o 

o 


m 

ON 

CM 


T"- 

CM 


00 

CM 


&•$ 

o 

8 


NO 

• 

CM 

CM 


CM 

CO 


m 

CO 




cd 

d 

o 

H 


U 

< 


£ 

cd 

23 


0) 

o 

u 

o 

Pm 

N 

•H 

< 


m 


m 

CM 


CM 

CM 


00 

« 

CO 


o 

m 


ON 

o 


r- 

O'. 

n 

m 
co 
■c ry 


NO 

00 

ON 


<1- 

{/> 


m 

m 

r>- 

* 

co 

<r 

</> 


CM 

CO 

NO 

•t 

<r 

</> 


cx 

CU 

0 

co 

a 

cd d 
co cu 
d oo 
a> <3 

4-1 

a> 

Q 


a) 

o x 


CD 

CO 

d 

0) 

44 

CD 

Q 

4-) 

O 

d 

d 

CD 

0 

d 

d 

cd 

cx 

<D 

Q 

a) 

X 

d 

>N 

Xi 

CO 

CD 

CJ 

•H 

> 

d 

<D 

co 


d 

4-» 

CO 

X 



CD 

cj 

CM 

4-1 

*H 

d 

NO 

O 

rH 

CO 

QN 


CX 


rH 

So 

CX 

OO 


d 

d 

d 

«\ 


CO 

*H 

rH 

rH 


0 


•H 

44 

d 

So 

X 

O 

o 

d 



44 

cd 

CO 

CO 

d 

d 

d 

<D 

CD 

d 

o 

CO 

cx 

cd 

cx 

cd 


X 

C0 

X 

CO 


CD 

o 

CD 

d 

d 

d 

O 

o 


d 

•H 


(D 

cx 

> 

X 

X 


d 

CD 

d 

CD 

CD 

X 


a 

CO 

CO 

So *H 


*H 

rH 

> 

rH 

rH 

d 

d 

cd 

X 

CD 

CD 

d 

cd 

0 

co 

XI 

d 

d 



co 

O 

co 

> 

(D 

44 

co 

*H 



o 


CO 

CO 

d 

d 

cd 

CD 

o 


S 

°H 




rH 


(D 


CX CM 

X 

<3 

cx X 

d 

co 

d 

ON 


Q 

CO 

rH 

44 




O 


d 




>> O «H d 
a | d 
d a so a> 

CD o d e 

00 CJ Cd <D 

<3 d d 
d d d 
S>n *H cd o 
H cd h o 


CO 


d 

co 

cx d 


d 




cd 

rH 

cx 

d 

o 

CX 


CM 



cd 

d 

(D 

d 



<r« 


CO 

d 

co 

CJ 


CD 


00 


X 

O 



d 

X 


CO 


o 

d 

CD 

(D 

O 

d 


</> 


o 


CO 

d 

•H 





00 

O 

d 

d 

d 

d 





d 

n) 


a. 

•H 




d 


44 

•H 






o 

X 

(D 

d 


X 




44 

X 

Q 

d 

• 

CD 


ON 



cd 


co 

CD 

X 


ON 


X 


1 

•H 

CJ 

d 




CD 

d 


X 

d 

rH 


1"* 


X 

o 

S>N 


O 

CJ 


CM 


d 

d 

CJ 

X 

Pm 

d 


•co¬ 


cd 


d 

d 


•H 




£ 

So 

CD 

cd 

d 





cd 

cd 

0£ 


•H 

CD 





0 

<3 

oo 

<3 

d 




co 


(D 


cd 


co 


d 

rH 


d 

X 



d 


a 

•H 

rH 

d 

d 

d 


o 

co 

cd 

cd 

a 

CJ 

cd 

d 


*H 

d 

d 

d 

a 

o 


CD 

• 

rH 

cd 

d 

CD 

d 1 

d 


0 

CO 

rH 

rH 

d 

X 

CO 

cx 

> 

(X 

CD 

♦H 

rH 

o 




cd 

•H 

*H 

0 

O 

u 

X 

a> 

* 


d 

d 

v_/ 

X) 


CD 

CO 

CD 


a* 

•H 


rH 

X 

d 

00 

CN 

CD 

> 

rH 

44 

cd 

d 

CD 

cd 

So 


•H 

cd 

O 

d 

d 

44 

d 

0 X 

d 

d 


o 

o 

CD 

cd 

d 

d 

CJ 

O 


H 


Q 

0 

<3 

cd 

cd 

H 


cd 

X 

a 






453 


SOURCE: Office of the Secretary of Defense, Directorate for Information Operations, Military 
Prime Contract Awards and Subcontract Payments or Commitments, July 1969-June 1970 
(Washington: Department of Defense, 1970), pp. 12-13. 







ACDA/E-156 


o> 

vO 

I 

m 

m 

on 


CD 

G 

cd 

a) 


cd 

u 

CD 


Fn 


4-i Cd 

<u a 

4*i o 

J-i *H 

£} 

to *H 

CM Ml V-4 

Cd 4J 

w -u co 

►4 *H *H 

PQ rH Q 

<1 

H S 0) 

00 

G cd 

•H 4-1 

c 

co aj 

■u o 

u M 

G 0) 

t) Pm 

o 

G 

PM 

G 

O 

**") 

32 

oo 

a 

I 

CD 

U 

m 

*H 

CO 











eg 


6^2 








vO 

ON 

O 

in 

vO 

00 

co 

in 

00 

o 

rH 


O 

eg 


tH 

eg 

vO 

<r 

eg 

On 

in 









CO 

vO 









r^- 

CT\ 

O 

m 

r^- 

On 


CO 

ON 

ON 

n 

ON 

d 

rH 

ON 

o 

m 

m 

ON 

CJN 


rH 

o 

eg 

rH 





eg 

m 

rH'J 

O 

eg 

rH 

rH 




eg 

00 


rH 








eg 


rH 








eg 










oo- 

r 










-cn- 


8-2 








r-* 


6>2 








on 

CO 

o 


VO 

co 

m 

rH 

ON 

00 

ON 

CO 

O 

r- 

00 

m 

00 

rH 

ON 

in 

e- 

in 

• 








rH 

VO 









CO 

on 

O 

o 

rH 

oo 

CM 


ON 

eg 

•N 

ON 

o 

00 

eg 

o 

m 


ON 

m 

^N 

rH 

o 

co 

rH 





CO 

<r 

rH 

o 

rH 

eg 

rH 




eg 

ON 


rH 








eg 


rH 








CM 










■cn 


' 








<n- 


^2 










8-2 








m 

e- 

o 


ON 

ON 

eg 

e*- 

vO 

<r 

in 

eg 

O 

<3- 

ON 

CO 

rH 

in 

eg 

vO 

m 

m 










vO 








• 

eg 

ON 

o 

co 

00 

00 

<r 


eg 

r-» 


On 

d 

e- 

eg 

vH 

m 

e- 

O 

m 

#N 

rH 

o 

CM 





rH 

CO 

H 

rH 

o 

rH 

eg 

rH 



rH 

eg 

ON 


rH 








eg 


rH 








CM 










-cn- 










<n- 


S'-? 








o 


<82 









vO 

O 

vO 

rH 

CM 

H 

vO. 

CO 

eg 

ON 

rH 

O 

rH 

rH 

m 

m 

rH 



00 

m 









m 

vO 









m 

ON 

o 

ON 

in 

00 

<r 

<3* 


hT 


ON 

O 

ON 

CO 

eg 

m 

m 

On 

m 

«N 

rH 

o 

cm 





rH 

CO 

ON 

rH 

O 

tH 

eg 

rH 




CM 

m 


rH 








rH 


rH 








CM 










-cn- 










<n- 


64> 








co 


6-2 








ON 

m 

O 

r*- 

00 

e>- 

o 

rH 

in 

m 

00 

o 

O 

CO 

rH 


eg 

eg 

rH 

o 

00 

m 









m 

vO 









vO 

ON 

O 

CM 

<r 

vO 

cn 

ON 

rH 

H 

#N 

ON 

O 

o 

rH 

eg 


<r 

o 

r- 


rH 

O 

CO 





rH 

co 

vO 

rH 

O 

eg 

eg 

rH 



rH 

eg 

CO 


«H 








rH 


rH 








eg 










-cn- 










</> 




















^^ 










CD 










co 










G 










H 










cd 










cd 










H 










rH 









rH 










rH 







4-1 



o 







4-1 



o 







d 



TJ 







G 



T3 







<1) 

r 

d 








0 ) 







0 ) 



S 

o 

g 

4-4 




<D 



0 


u 

4-4 




O 



cd 

CD 

0 ) 

o 




O 



cd 

CD 

0) 

O 




cd 



El 

a> 

42 





cd 




0 ) 

42 


G 



CM 



g 


4J 

CD 

G 



CM 



M 

•H 

4-1 

CD 

O 



C/3 



<3 

4-1 

o 

G 

O 



cn 



C 

4-1 

o 

G 

OC 







•H 


0 

OC 







•H 


O 

0 ) 



X5 



rH 

XJ 

XJ 

•H 

<U 



xs 



rH 

*d 

T3 

•H 

U 



52 

CD 


cd 

o 

G 

rH 

4-1 



G 

CD 


cd 

o 

C 

rH 

cd 



cd 

a 


d 

s 

cd 

rH 

cd 



cd 

o 


G 

g 

cd 

rH 

o 




’H 


o 

§ 


*H 

o 

/"■N 



*H 


O 

M 


•H 



4-5 

CD 

G 


*H 

o 

CD 

0 


8-2 

4J 

CD 

G 


•H 

o 

CD 

s 

g 

'w' 

4-4 

a) 

o 


G 

u 

0 ) 

S-/ 

H 

'w' 

4-4 

a) 

O 


4-1 

CJ 

0 ) 


o 


cd 

rH 

g 


G 


o 


a 


cd 

rH 

G 


G 


o 


G 

rH 

G 

*H 

4-J 

CD 

a) 

G 


<—1 

d 

rH 

g 

•H 

4-> 

CD 

CL> 

u 

•H 

rH 

T) 

cd 

o 

CD 

a 

a 

> 

a) 

> 

cd 

T3 

cd 

a 

CD 

O 

a 

> 

0) 

> 

cd 

O 

4J 

g 

CD 

<D 

•H 

G 

42 

H 

G 

o 

4-1 

g 

CD 

0 ) 

■H 

G 

42 

u 

4J 

G 

O 


•H 

rH 

42 

O 

G 

ai 

o 

u 

O 

•H 

•H 

rH 

42 

O 

4-J 

<u 

O 

PM 

H 



w 

cn 

cj 

o 

cn 

H 

PM 

EH 

<d 

s 

w 

cn 

CJ 

o 

cn 

EH 


454 

















TABLE 2 (continued) 


ACDA/E-156 


0 

6^5 

O 

CO 

CO 

00 

T"- 

• 

• 

• 

• 

OV 

O 

00 

CO 

00 

«H 

O 

rH 

rH 

rH 


in - 4 - 

• • 

-Cf CM 


i-H CT\ 
« • 

O CN 

rH 00 


n- 

n- 

ov 

m 

CO 

</> 


ox 

xo 

crx 


O 

o 

o 


00 

m 

ax 

n 



CM 

• 

• 

• 

• 

• 

• 

• 

Ox 

cm 

00 

CO 

in 

O 

Ox 

*H 

rH 



rH 

rH 

CM 


vo 

00 

OV 


O' 

</> 


cn 

M3 

O 


cS 


M3 

u 
cd 
ffi 


0) 

2 

O 

a> 



m 

n ^ m to h n c?\ lt\ 
••••••• f"- 

<HO00<fi/0«Hf^ * 

CM 1—I H H rsl CO 

<sy 



6-5 








CO 


O 

r- 

VO 


m 

in 

m 

r-v 

CO 

VO 

• 








VO 

ax 

O 

rH 

Ox 

ax 


CM 

CO 

00 


*H 

O 

CM 




rH 

rH 

cm 



</> 


0) 

o 

cn 


id 


cn 

4-J 


o 

•H 

d 

.JO 

hJ 


XI 

d 

cd 


cn 


vO 

6-S 

O 

vD 

n- 



00 

CM 

vO 

• 

• 

• 

• 

« 

• 

• 

Ox 

O 

ar\ 

0 

Ov 

CO 

CM 

tn 

rH 

O 

rH 

rH 

rH 



rH 

rH 







n 

O 

r^ O O tH 

00 

r-. 

VO 

! • 




rt\ 

1 r~\ 

O *n 0 vex 

»r\ 

ry 

rH 

O 

CM rH rH 


rH 


rH 







4-> 





a 




CL) 

§ 




O 

ni 

cn 

>x 


cd 

g 

<3 

d 


a 

d 

•H 

O 


CO 


4-J 

M 




•H 

<3 


M3 

rH 

M3 

4J 


d cn 

cd 

O 

td 


cd 0 

a 


O 

/ — s 

•H 

0 

§ 



4 -J to d 

•H 

O 

4-J 


M-4 CU O 

4-J 

O 

O 


Cd rH d 

0 


2 

rH 

d -H 4-J cn 

0) 

d 

XI 

Cd 

U W Cj Cl 

> 

a) 

0 

4-J 

d 0 } Q) *H 

d 

x: 

d 

O 

•H *H rH -d 

O 

4-J 

PH 

H 

<! f W w 

O 

0 



CO 



00 

sf 



9 

CM 



00 

#x 



CM 

00 




CO 




<s> 

• 




cn 

cn 



rH 

d 



cd 

0 



4-J 

Cl 



O 

cd 



4-J 

<3 


Ox 


Me 


OV 

O 


O 

#v 

M 


CO 



0) 


CM 

M3 

> 


<jy 

M3 

•H 



cd 

4-1 


/*s 

4-J 

§ 


cn 

O 

0 


d 

a 

4-J 


cd 


2 


rH 

>x 

C 

d 

rH 

cd 

1 

Q) 

0 

6 


-d 

XI 


d 

4-J 


rH 

cd 

O 

14-4 

•H 

H 


O 

cd 


M3 


4-J 

rx 

d 

cn 

QJ 

d 

cd 

d 

r <3 

0 


0 


•H 

cn 

*H 

M3 

4-J 

0) 

rH 

0) 

•H 

0 

rH 

M3 


•H 

rH *H 

rt 

3 

> 

Cd B 

3 

£ 

d 

4-J ^ 

0 


a) 

0 

Pi 


CO 

H 

cd 

>0 


<3 

2 


a) 

00 

cd 

cn 

H 

3 

0 " 

w 

«■« 

00 

a 



CO 

<3 

rH 

•H 

4-J 

X 

<3 

H 


<3 

O 

d 

(3 

4-J 

CO 

•H 

CO 

-O 

2 

CO 

o 


455 


Services, Construction, All Actions of Less Than $10,000, Intragovemmental, Work Outside 
U.S., Educational and Non-Profit Institutions 

SOURCE: Office of the Secretary of Defense, Directorate for Information Operations, Military 
Prime Contract Awards and Subcontract Payments or Commitments, July, 1969-June, 1970 
(Washington: Department of Defense), pp. 22-24. ’ 1 











ACDA/E-156 


Vietnam resulted in another major shift, with greater emphasis on 
fighter aircraft, conventional armaments, food, clothing and fuel. 

Military purchases of relatively standard, commercial types of 
manufactured items receive much smaller shares of the defense budget. 
Items procured include petroleum products, spare parts, medical equip¬ 
ment, and office supplies. Although smaller than the weapon system 
market, this category of military procurement is of interest to nearly 
all elements of American industry. The requirements are relatively 
stable, with a far lower rate of product obsolescence than is the 
case for the exotic weapon systems. 

XII.1.2 The Internal Responses 

The responses on the part of defense contractors to these basic 
changes in their external environment take a number of forms. Some 
are essentially passive, such as layoffs of personnel when contracts 
are terminated. Other actions are more positive, such as attempts 
at diversification into nonmilitary lines of business. Still other 
responses are more hedged, such as contingency planning. 

Each of these industry reactions to shifts in defense demand 
is analyzed in the sections that follow. Greatest attention is paid 
to diversification experiences and potentials. 

XII.2 RESPONSES TO PRIOR CUTBACKS 

A study of a representative sample of large defense contractors, 
conducted by the Stanford Research Institute, reported a basically 
similar pattern of initial company response to a decline in defense 
business. ‘ The immediate action was to lay off large numbers of 
personnel, with little distinction as to whether they were production 
or research and development personnel. 

In all cases, the companies made a specific effort to retain 
the better people by bumping personnel in other parts of the company, 
even though they may not have been working on the project being can¬ 
celled or cut back. This move to maintain the better people — in¬ 
cluding managerial, production, and R & D — was found to be a 


Murray L. Weidenbaum and A. B. Rozet, Potential Industrial 
Adjustments to Shifts in Defense Spending (Menlo Park, California: 
Stanford Research Institute, November, 1963), pp. 15-18. 


456 







ACDA/E-156 


carefully studied part of each company’s reaction to a military cutback. 
Such bumping permeates the total organization, regardless of geographic 
location, cost increases, and disruption of other work. 

Many industry executives stated that such cutbacks were helpful 
in upgrading the general quality of personnel in the company. One 
company which had reduced its R & D organization from 5,000 to 500 
over a two-year period stated, H In making the cutback we bumped the 
poor people, and in fact, simultaneously carried on a hiring campaign 
so that as a rgsult we were able to upgrade the total R & D result 
considerably. 99 


These past experiences indicate that the defense companies act 
rapidly and matter-of-factly in carrying out the pattern of layoff and 
transfer in the race of actual cutbacks. The internal mechanisms for 
handling contract terminations in terms of both personnel changes and 
contractual procedures are well-defined and well-established as a 
part of the industry’s way of life. 

Indirectly, shifts in the military market result in more positive 
actions on the part of defense industry management. During the 1955- 
1959 period, that is, following the end of the Korean War, defense 
companies made numerous moves to realign their organizational structure 
and to increase their investment in new fields of activity to. meet the 
changing patterns of weapon system requirements. 


Most of the actions taken to counter the post-Korean cutbacks 
were devoted to other areas of military business. As a result, the 
aircraft companies, in particular, diversified their product line into 
complex electronic systems, propulsion activity, and nuclear work.. 

Much of the investment that went into bringing this change about was 
under government contract. The amount of risk capital supplied by 
the companies themselves was relatively limited. 


It would appear from these past experiences that, where the 
industry has substantial amounts of lead time and can see pending 
changes that can be considered more as opportunities than as threats, 
it will take specific actions oriented to taking advantage of these 
new opportunities. Generally, these actions have been centered in 
the familiar government markets utilizing established capabilities. 


Recently, several large and medium-size defense contractors have 
set up new divisions or subsidiaries geared to providing products or 


2 Ibid.,p. 15. 


457 




ACDA/E-156 


systems to civilian government agencies. Recent organizational changes 
along these lines have followed one of two paths (see Table 3). Some 
companies, such as Aerojet-General Corporation, are setting up divi¬ 
sions which focus on one specific public sector market, such as 
abatement of environmental pollution. Other firms have set up units 
with broader charters to seek out government business generally. An 
example of the latter approach is the TRW, Inc. Civil Systems Program 
Management Office. 

XII.3 CONTINGENCY PLANNING IN THE DEFENSE INDUSTRY 

Most surveys of contingency planning by the defense companies 
tend to conclude that the top managements do not seriously consider the 
eventuality of disarmament or even of substantial reductions in the 
size of the military budget. 

The financial vice president of a leading defense company was 
recently quoted as saying, '’We’re going to ^ncrease defense budgets 
as long as those Russians are ahead of us.” 

Nevertheless, staff studies are commissioned by most of the lead¬ 
ing defense contractors. ”Soft” planning is being done in the form of 
Studies of "What would happen in the event of disarmament?” or "Seven¬ 
teen alternatives to defense production" or "Game theory approaches to 
national strategy for arms control.” However, little "hard” planning 
is found — in terms of detailed descriptions of courses of action 
that would bg taken by the companies in the event of arms control or 
disarmament. 


XII.4 NON-MILITARY DIVERSIFICATION 

The continuing need for defense industry diversification into 
other markets may have been most clearly expressed by the late John Jay 
Hopkins, the founder of the General Dynamics Corporation, in Congres¬ 
sional testimony: 

"Reviewing the history of two almost disastrous 
wars, and appraising the technological and ideological 


Interview with Samuel F. Downer of LTV Aerospace, reported in 
Bernard Nossiter, "The Pentagon’s ’Wish List’ of New Weapons," Boston 
Globe , December 16, 1968. 

4 

Weidenbaum and Rozet, pp. 9, 19-20, 


458 







ACDA/E-156 


TABLE 3 

New Organizational Structures for Dealing with Government Markets 


COMPANY 

Aerojet-General Corp. 

AVCO Corp. 

Bendix Corp. 

EG&G Corp. 

North American Rockwell Corp. 
Thiokol Chemical Corp. 

TRW, Inc. 

Westinghouse Electric Corp. 
American Cement 
Control Data Corp. 

Emerson Electric 
Lockhead Aircraft Corp. 
Northrop Corp. 

Palph M. Parsons 
Raytheon 



NEW DIVISION OR SUBSIDIARY 

Environmental Systems Division 
Economic Systems Corporation 
Civil Systems Division 
Environmental Sciences Operations 
Nartrans 

Economic Development Operations 
Civil Systems Program Management Office 
Urban Systems Development Corp. 


Consortium on civil systems market 
under B. A. Schriever Associates 


SOURCE: William H. Gregory, ’’Industry Probes Socio-Economic Markets, 

Aviation Week , Vol. 88, No. 24 (June 10, 1968), pp. 39-5/, and 
"Job Training Programs Expanding," Aviatio n Week, Vol. 88, 

No. 25 (June 17, 1968), pp. 43-55. 


459 





ACDA/E-156 


realities of this century, it is my conviction that 
defense must be a permanent business — a permanent 
way of life. And that in order to keep in being those 
aggregates of vital skills that underlie our capability... 
to be strong, the modern industrial corporation should, 

I believe, seek a broader base. It must be strong in 
defense production, strong in civilian production. It 
should not, I believe, for the economic and political 
welfare of the country, be entirely dependent upon 
the armed services — it must not, for the military 
safety of the Nation, be devoted solely to commer¬ 
cial causes." 

Mr. Hopkins went on to note the situation of the companies that had not 
expanded into civilian markets: 

"Those companies which are not yet diversified— 
which depend largely upon military orders — 
obviously must contemplate serious problems of 
long-term growth and stability." 

XII.4.1 Post World War II Burst of Enthusiasm 


Ever since they attained the production peaks of World War II, 
the major military contractors have been concerned with the problem of 
diversifying into new markets and new types of production in order to 
maintain and expand the scale of their operations. The older and more 
established industries, such as automobiles, rubber, and steel, which 
had originally converted from civilian markets, experienced little 
difficulty in returning to their traditional lines of business when 
the war was over. Backlogs of pent-up demand and accumulated wartime 
savings made this transition relatively easy. 


U.S. Congress, 84th Congress, 2nd Session, House of Representa¬ 
tives Committee on Armed Services, Hearings Before the Subcommittee 
for Special Investigations Commencing February 16, 1956, Aircraft 

Production Costs and Profits , (Washington: Government Printing Office, 
1956), p. 2574. 

This section draws upon material in "Aircraft Makers Diversify¬ 
ing," Business Week , No. 891 (September 28, 1946), pp. 21-22; Murray L. 
Weidenbaum, "Product Diversification in Aircraft Manufacturing Indus- 
try," Analysts Journal , Vol, 15, No. 2 (May, 1959), pp. 51-56; Murray 
L. Weidenbaum, "Problems of Adjustment for Defense Industries," in 
Emile Benoit and Kenneth Boulding (eds.). Disarmament and the Economy , 
(New York: Harper & Row, 1963), pp, 66-86. 




460 












ACDA/E-156 


In contrast, however, the specialized defense contractors — 
notably those In the aircraft industry — had typically grown during 
the wartime period from small job shop operations to large industrial 
enterprises. The virtual or at least temporary disappearance of their 
basic market when the war ended brought fundamental problems of adjust¬ 
ment, The multitude of efforts that these companies made to diversify 
into other lines of business was characterized by diversity, enthusiasm, 
and confusion. One among numerous examples of the naivete of some of 
these efforts was contained in the recommendation by a prestigious con¬ 
sulting firm to one large aircraft producer that it manufacture 
pesticides for farmers. 

Some of these efforts were merely designed to take immediate 
advantage of a temporary demand for consumer items which had been 
missing from the economy during World War II. Other efforts were 
designed to utilize the substantial cash reserves accumulated during 
the war, and to help tide the companies over during the reconversion 
period. Some of the defense companies began producing buses, trolley 
coaches, marine engines, aluminum canoes, and sport boats, which 
required their skills in fabricating light metal products. Some of 
the related products were a bit far afield from their customary fields, 
including bottle labelers, coin-changing machines, dry cleaning 
apparatus, artificial hands and midget racing cars. Among the most 
imaginative efforts was the production of coffins, both stainless 
steel and aluminum. 

Several defense firms became subcontractors for established 
companies in commercial markets. In that role, they built heater 
cases, parts for musical instruments, automobile components, plumbing, 
cabinets for radios and water tanks for railway cars. One company 
bought into a consumer finance agency in order to prepare for the post¬ 
war boom in private aircraft that, unfortunately, never materialized. 

In general, the income from these new ventures was disappointing. 
They did not generate a significant fraction of the sales attained 
during World War II; the profits were often negative. This was illus¬ 
trated by the experience of the major aircraft companies during the 
initial postwar adjustment period,1946-1948, when sales declined to a 
tenth of their former peak and losses totaled over $50 million. 

Most of the diversification activities by the major, specialized 
defense contractors, which were begun at the end of World War II, were 
abandoned as unsuccessful or marginal, or sold to firms traditionally 
oriented to industrial or consumer markets. The expansion oi the 
military budget brought on by the Korean War soon turned the primary 


461 


ACDA/E-156 


attention of these firms back to the military market. When faced 
with the alternative, few aircraft companies preferred to manufacture 
powered wheelbarrows or buses rather than bomber or fighter airplanes. 


XII.4.2 Post-Korean Industrial Diversification 

The end of the Korean War, of course, sparked another round of 
interest in commercial diversification on the part of defense con¬ 
tractors. These efforts attempted to take account of some of the 
worst mistakes of the past, bypassing particularly the consumer 
markets which had prove^ to be so alien to the high-technology 
cefense-oriented firms. 

The largest diversification efforts were represented by the 
closest adaptations of military work — aircraft for the airline and 
executive markets. The other diversification projects also typically 
were limited to industrial markets. These included industrial elec¬ 
tronics, small gas turbine engines, nuclear reactors, wall panels for 
commercial buildings, and heavy-duty land vehicles. Despite the 
variety of these latter efforts, the non-government sales of the major 
aircraft companies during the middle 1950 f s were almost entirely trans¬ 
port aircraft delivered to the commercial airlines. Most of these 
industrial diversification efforts outside of aerospace fields have 
since been abandoned. The surviving diversification programs continue 
generally at marginal levels — either actually losing money, barely 
breaking even, or at best showing profit results below typical military 
business returns. 


XII.4.3 Reorientation in Defense Industry Diversification 

During the late 1950 1 s and early 1960 5 s, the interest and atten¬ 
tion of the high technology companies that primarily serve the military 
market were focused predominately on the expanding military and closely 
related space budgets. The cutbacks in 1963-1964 in military procure¬ 
ment programs, particularly for large missile systems, produced a 
reorientation of defense industry thinking on diversification, a shift 
with particular significance for the civilian parts of the public 
sector. 

Several reexaminations of the previous diversification efforts 
of defense contractors, as well as new evaluations of their peculiar 


' Ibid. , p. 82. 

8 

Aircraft Production Costs and Profits, pp, 2724 and 2928. 


462 







ACDA/E-156 


strengths and weaknesses, led to the awakening of their interest in 
doing^work for government agencies other than the military establish¬ 
ment, The success of the leading defense firms in gaining the major 
NASA contracts was an important indication of their ability to use 
their engineering and scientific skills in other government markets. 
It also demonstrated that it was not the ability of defense producers 
to fabricate light metals (shades of aluminum and stainless steel 
coffins) which was their primary competitive characteristic. Rather 
it was their scientific and systems management capability which 
enabled them to develop and penetrate new markets. In their search 
for additional civilian public sector business, often the new market 
had to be established and developed before it could be penetrated. 
That is, the potential contractors for civilian public sector systems 
not only had to* convince the government customer that they had the 
ability to perform as promised, but that the very undertaking itself 
was something that the government, rather than private enterprise, 
should sponsor and fund. 


XII.5 ALTERNATIVE METHODS OF DIVERSIFICATION 

Five major methods have been utilized by defense contractors 
for commercial or nondefense diversification: 1) mergers with a 
variety of companies in defense and industrial markets, 2) licensing 
of by-products of the military product line to established commercial 
companies, 3) joint ventures with foreign companies, usually in a 
technical area, 4) creation of a by-products exploration group based 
on internal inventions, and 5) permitting military divisions to 
develop nonmilitary products during periods of slack defense business. 

XII.5.1 Mergers 

Thp roprapr route is generally taken bv companies that desire to 

- -TV- o • 

broaden their defense capabilities, such as a large aircraft company 
(Lockheed) acquiring an electronics firm (Stavid) or a propulsion 
company (Grand Central Rocket). In part, thus, the industrial cap¬ 
ability or diversification that is acquired through such a merger is 
often secondary or accidental to the main purposes of the merger. 
Other mergers are of the "stockholder diversification" type — Martin 
Aircraft Company and American—Marietta. These latter combinations 


9 See Electronics Industries Association, Changing Times in the 
Defense Industry (Washington: The Association, 1964). 


463 







ACDA/E-156 


afford little opportunity for utilizing the physical resources — 
manpower or facilities — of the military producers. Several have 
been simply viewed as spreading stockholder risks over wider market 
areas. 


Based on experience since the mid-1950 ? s (see Table 4) the large 
aerospace companies--those with assets of $200 million or more at the 
time of the merger — have been acquiring companies in other high 
technology oriented industries, also primarily catering to military 
and space markets. Over three-fifths of the companies that these firms 
acquired in the years 1955-1967 were in the electronics, chemical, and 
instrument industries. This development follows from the tendency of 
defense and space programs to require large amounts of electronic, pro¬ 
pulsion, instrumentation, and other extremely sophisticated ’'subsystems’ 1 
and less of the airframe and fabricating capabilities which were the 
mainstay of the traditional firms in the aerospace industry. 

Medium-size aerospace companies (those with assets between $50 
million and $200 million at the time of the merger) have become involved 
in a somewhat different pattern of acquisition. To a far greater 
degree than the larger companies, these firms have been acquiring other 
companies with metal fabrication and machinery production capabilities. 
However, these other firms typically are outside of the aerospace 
industry, indicating a tendency toward diversification, but in somewhat 
less technically-oriented industries than in the case of the larger 
aerospace corporations. 

In contrast, the relatively small aerospace companies (those with 
assets under $50 million) have made numerous acquisitions of other, also 
small aerospace companies. The differences here are both of degree 
and size. The acquiring companies in this size category, as well as 
the firms being acquired, are usually suppliers of components and fabri¬ 
cated parts of larger aerospace systems, rather than designers and pro¬ 
ducers of end products or major technical subsystems. 

The smaller aerospace companies can engage in mergers within the 
aerospace industry itself to a far greater degree than the giants of the 
industry without running afoul of antitrust considerations. Because 
of their limited scientific capability and technical management, they 
are showing far less interest in mergers with companies in highly 
technical fields. Like the medium size aerospace firms, the smaller 
corporations also are involved in a relatively large proportion of 

acquisitions of firms with relatively similar levels of technology in 
the metal fabricating and nonelectrical machinery industries. 


464 


ACDA/E-156 






td 

o 


o 


o 





4J 

o 


o 


o 





O 

1 — 1 


rH 


rH 





H 




















CD 










£1 

co 


rH 


rH 





4J 

CM 


CM 


rH 





O 










CD 










4-J 






So 




P 






u 




CD 






u 




s 






CO 




p 

r^. 


5 


CO 

p 










i 'G 




4J 






p 




CO 






M 


P 1 


P 








cd 


M 








B 








rO 


0 










O 


rH 






crj 


o 


cd 






U 




o 






<D 


T3 



vO 


00 


rH 

50 


CD 


0 

rH 





M 

f"- 



CD 






Q) 

vD 

*H 


x: 






S 

I 

P 


o 







LO 

O' 








0) 

m 

O 








U 

o> 

<J 


p 






cd 

rH 



o 






o.* 


4-4 


•H 






co 


O 

rH 

4J 






o 

0) 


cd 

cd 

o 


rH 


CO 

u 

N 

Si 

4J 

o 

CM 


CO 


CO 

<D 

•H 


<u 







< 

CO 

■U 

50 

H 








CO 


X> 






4m 

So 

p 


cd 






o 

a 



Pm 







cd 

p 








p 

B 

M 








o 

0 



CO 






•H 

o 



o 






U 

u 



•rH 






P 




P 







13 



O 

oo 


on 


CO 


a 



M 

CM 


rH 


rH 


cd 



4J 






•U 




a 






CD 




CD 






•H 




rH 






a 




W 






a) 














hi 






cd" 




6 






4J 




cd 






P 




a 

m 


rH 


ON 

0) 




CO 



CM 


CO 

o 




o 






J-i 




u 






0) 




CD 






Pm 




c 











/—N 




/‘‘"S 






P 




P 






o 


P 


o 






*H 


o 


*H 




1 


rH 


*H 


rH 




o 


rH 


rH 


rH 



4-1 U 

>• 

*H 


rH 


•H 




O 0) 

p 

0 


•H 


0 




< 

cd 



0 





0) 

B 

O 




O 



N t>0 

0 

O 


O 


m 



•H p 

o 

CM 


o 


<j> 



on -H 

CJ 

</> 


CM 






u 



0 

<J> 


M 



-U *H 

p 

0) H 


1 

i—i 

CD 



a) P 

a 

&o a) 

•H 

O 

rH 

13 



co cr* 

cd 

M > 

13 

m 

cd 

P 



co a 

a 

cd o 

P 

</> 

0 

P 



<J C 

CO 

XI ^ 

a 


CO 

'w' 


465 


SOURCE: Murray L. Weidenbaum, The Military/Space Market: The Intersection of the Public 
and Private Sectors , St. Louis, Washington University, Department of Economics 
Working Paper 6712 (September, 1967), p. 49. 






ACDA/E-156 


XII.5.2 Licensing and Joint Ventures 

The licensing and joint venture routes represent a similar and 
popular approach to non-defense diversification, and occasionally a 
successful one. Essentially, this method utilizes the research and 
development capability of the defense/space company and the marketing 
capabilities of the other party to the venture or licensing agreement. 

Joint ventures with foreign companies are particularly popular 
in order to penetrate overseas markets. Aerojet-General Corp. has 
moved into the field of optical equipment with the formation of 
Aerojet-Delft, a joint venture with N.V. Optische Industrie of Holland. 
The new company manufactures cameras, lenses, and electron-optic 
products. Ling-Temco-Vought has organized Pye-Ling, Ltd., a joint 
venture with Pye, Ltd., a major British electronics manufacturer. 

North American Rockwell has formed two joint companies abroad to 
investigate peaceful uses of the atom, Interatum with a German firm 
and Dynston with two French firms. 

Via licensing, the Boeing Company has obtained royalties from 
other companies who have acquired from it the rights to manufacture 
electrocafdiographs^respiration meters, thermometers, and oxygen 
consumption meters. 

The primary consideration generally advanced for licensing 
rather than producing and selling the by-products of the basic military 
product lines is the absence of capability for sales, distribution, 
and service. 

XII.5.3 By-Product Exploration Group 

North American Rockwell has established a subsidiary, Navan, to 
manufacture outright or license production rights to by-product inven¬ 
tions resulting from the company’s technical capabilities. A typical 
example is ’’Klimp," a device which replaces nails in the assembly of 
packing anci shipping crates. 

The Boeing Company’s Boeing Associated Products venture is 
modeled after the North American approach, except that no outright 


"Building a New Age on the Scientific Discoveries Emerging From 
Research," Magazine of Wall Street , Vol. 114, No. 6 (May 30, 1964), 
pp. 265-266. 


466 






ACDA/E-1>6 


manufacturing is performed; only licensing of Boeing internal inven¬ 
tions is offered. 


Internal Development of Commercia l Products 

The commercial, nonaircraft products that result from internal 
development on the part of defense corporations generally yield less 
revenue than the items in the basic military product lines. They 
also account for a minor fraction of the sales volume and employment 
of these companies. Of 23 internal product developments of defense 
firms analyzed by the Denver Research Institute, 16 resulted in annual 
sales of less than $1 million. Of the other seven, five produced less 
than $5 million each and the other two, between $5-10 million. Four 
of the 23 were terminated by the time of the study, 10 were losing 
money and only nine wejje reporting any net profits, although no profit 
rates were available. 

Management interest and support is often reported as being only 
moderate and intermittent. The majority of commercial products in¬ 
ternally developed by defense companies fall into three major industry 
groups: 1) electrical machinery, primarily electronics equipment, 

2) transportation equipment, mainly through the extension of aircraft 
technology to surface vehicles and^o aircraft handling, and 3) profes¬ 
sional and scientific instruments. 

The individual commercial items produced and marketed cover a 
wide array: precision-welding machines, lightweight structural 
material, fuel oil registers, gas turbine engines, powered wheel¬ 
barrows, aluminum curtain walls, bus bodies and, literally, the kitchen 
sink. 


In what is still the most comprehensive analysis available, the 
National Aeronautics and Space Administration in 1963 commissioned the 

p. 266. 

12 

John S. Gilmore and Dean C. Coddington, Defense Industry Diver¬ 
sification: An Analysis with 12 Case Studies , U.S. Arms Control and Dis¬ 
armament Agency Publication No. 30 (Washington: Government Printing 
Office, January, 1966), p. 42. 

1 3 

Murray L. Weidenbaum, "Adjusting to a Defense Cutback: Govern¬ 
ment Policy Toward Business," Quarterly Review of Economics and Business , 
Vol. 4, No. 1 (Spring, 1964), pp. 7-14. 




467 









ACDA/E-156 


Denver Research Institute to survey the various types of missile and 
space technology which either have had or may potentially exert effects 
on the civilian economy. Table 5 summarizes the impressive catalogue 
that resulted. However, no quantification of the results were available 
in terms of jobs or sales volumes that were generated. In part, this 
was not possible in view of the large extent to which many of^^he pro¬ 
ducts identified had not yet been used in commercial markets. 


XII.6 EVALUATING THE OBSTACLES TO DIVERSIFICATION 

In evaluating the diversification efforts of the major defense 
contractors, it is helpful to consider these undertakings from a broader 
view than merely entrance into commercial markets. 

In terms of diversification within military and related high 
technology government markets, these firms have been eminently suc¬ 
cessful. The shift from aircraft to missiles and space systems ranks 
as a noteworthy accomplishment in the development and sale of new 
products. (See Table 6.) Moreover, this latter type of diversification 
also met such basic and important business standards as high return on 
investment, increasing the growth rate of enterprise, and effective 
utilization of surplus resources and capabilities. This is a striking 
contrast to their commercial experience. 

A variety of explanations is given by students of the defense 
industry for the inability of the large specialized government con¬ 
tractors to use their capabilities successfully in commercial endeavors. 
The major reasons for the past failures fall into two major cate^gries: 
lack of management motivation and lack of required capabilities. 

The lack of management motivation, it appears, is due to such 
basic factors as the belief that strong incentives to change are absent. 
This is bolstered by the feeling that commercial opportunities are in¬ 
adequate. Thus, defense company personnel who are concerned with re¬ 
orienting their operations to more traditional lines of industry obtain 
limited interest or support from management. These factors are 
cumulative and interacting. 


John G, Wells, et al. , The Commercial Application of Missile/ 
Space Technology (Denver: University of Denver Research Institute, 
September, 1963). 

^Weidenbaum and Rozet, pp. 34-38. 


468 






ACDA/E-156 


U1 

-3 

3 

H 


C 

o 


p 

-C 


c 

o 

o 

cj 

<a 

CL 

Vi 


r 

T3 


C 

T> 


U 

«• 


T3 

3 


J2 


c 

o 


p 

J3 

0 

H 


V 

» 

w. 

at 


c 

«* 

*0 

a 

o 

< 


eq ^ 

■H O* 


g 


3 

A 

•W 

Id 

u 

a 

o 


c 

41 

T> 


O <*d 


3 

U 

a 

s 

1 


3 

O 


» (J 
O 3 
o -o 

4) 

p{ 


a> 
u 

C u 

41 

B T3 

o. o 

O Id Id 
^ O d. 

• 

I I 


*j ao 

c a 

41 -r4 
B « O 
« ■ 3 
> -h -g 
o x 8 

U Id u 

a £ 

B «d 

►H O 


o • ® 
• 3 

U II o 

a « -w 

i « c 

8*5 

O * t> 

^ £ H 

| 8? 


C X 

o o 


4J *o 
(0 V 
>~i m 
4) 

ac 


v> o 


sO 


& 


g 

je 

u 

« 

H 


s 


XXX 


W X X x X 


X X 


X X 


X 


X 


X X X X 


XXX 


X X 


X X 


X X 


X X 


X X 


X 


X X X X 


X X 


X X 


X X X X 


X 


X X X X 


X X X X 


X X 


3 

<J 

Id 



oe u «r oci 
« « U tf r-l 

<3 W -HQ. 
a ec u ff 


*> 

k 


a 3 < w 


Id « 0 
3 ® O 


Q to « <4 4J 

o a ® v « 

•H 4) M JC Id Id 

O 3 3 

« c -a v «j ~ 

u a) 41 w <9 

3 - - 

w 

Id r. 

2 91 Id II tl « 

® c u 5! a 

WKHfcHH 


3 3 

fl BT) 41 d # 

r-l 4J S « Id 3 i 

~-d a u Id 3 M 9 

ai w a m a id 



» Id 

•a 


« « o 
X « u « d-t 
*j oi « a q 

fr w *M 5 

O Of -H -4 <B O 

. sls-a" S 

H « 00-H 4d tK 

4 Id « « « M r-4 

3 

® « x ft. in t>i «h 

U 13 

£ I 


469 


John G. Well*, et_al, The Cocmercl a l Application of Mlaaile/Space Technology (Denver: University of Denver Research Institute, Sept«ber, 1963) 
p • 14 • 9 












Market Diversification of Aerospace Companies 


ACDA/E-156 


G 

ON 

nO 

ON 


00 

m 


on 


on o 

i—i i—i 


o 

o 



no cn 

m «H 


<h o 

CnI rH 


o 

o 


vO 
ON 
CO H 
Q) 
tH 

g 

G 

a. 

6 ^ 

o ON 
CJ H 

a) 

a 

G 

a. m 

CO X) 
O ON 
M rH 
0) 

<J 

IM 

O 

NO 
CO ON 
<D rH 
H 
<0 
CO 

l 4-t CO 
O NO 
ON 
4J rH 

g 

a) 

o 

M 

0) CM 
PH NO 
On 




f"- 



O 

NO 

ON 


NO CM 

T'-~ 



O 

O 

rH 






0) 

V 



O 

xi 

G 




u 

G 



4-i Q> 

o 

H 

H 


G co 


M 

C0 

u 

d g 

"G 

M 

•H 

cu 

B 0) 

G 

G 

O 

B 

U 4-1 

10 

> 

H 

O 

U <U 


o 

g 

4J 

C0 Q 

< 

o 


CO 

G. 

C/3 


R 

G 

<U 

<0 


o 

o 


S3 


CJ 



G 



g 

a 



o 

C0 



C0 

PH 



a, 

CO 


G 

CO 

o 

H-) 

4-) 

o 

G 

<3 

G 

u 

o 

H 

g 

G 

G 

O 

•rH 

< 

i 

H 

U 


G 


CO 


O 


a) 


S3 


G 


470 


SOURCE: Aerospace Industries Association, "Market Diversification of Aerospace Companies, 
Aerospace , Vol. 7, No. 1 (Winter, 1969), p. 5. 















ACDA/E-156 


The absence of incentive results in good measure from the belief 
of the top managements that there are adequate sales opportunities 
in government work and that the profit rates are, if anything, higher 
than on risky commercial ventures. 

Interviews with defense industry chief executives show their 
firm beJ.jLef in the long-term nature and rising trend of the military 
market. Also, their many prior unsuccessful diversification attempts 
have engendered the strong point of view that there are inadequate 
commercial opportunities for companies which have become oriented 
primarily to government work. The following quotations from inter¬ 
views with defense industry chief executives are typical: 

’’There is nothing to convert to; it is all a matter 
of marketing, timing and being able to commercially 
exploit the technology and you can’t legislate it., 
you can’t make them buy it." 

"There are darn few applications requiring high 
level technology. It is easier to escalate tech¬ 
nology than to depress it." 

The defenjg industry’s failures at commercial diversification are 
quite numerous. One company acquired a plastics research firm and 
subsequently closed down the operation. Another large defense contractor 
began producing metal curtain wall panels, lost money, and discontinued 
the venture. A third defense company acquired firms manufacturing mobile 
homes, reported operating losses, and subsequently sold the entire line 
of business. One of the companies also began and subsequently aban¬ 
doned an effort to penetrate the industrial computer business. The 
unsuccessful commercial diversification efforts literally ranged from 


1 

A vice president of General Dynamics Corporation, one of the 
nation’s largest defense contractors, was quoted as saying "one must 
believe in the long-term threat." Cited by Bernard Nossiter, "Mili¬ 
tary Industrial Complex Sees Post Vietnam Bonanza," Boston Globe , 
December 15, 1968, p. 58. 

17 The quotations in this section are taken from Weidenbaum and 
Rozet, pp. 33-38. 

^Ibid., p. 31. 


471 


! 





ACDA/E-156 


canoes to computers to coffins. As a result, there has been in most 
cases very limited management support in defense companies for or even 
interest in diversification. This is evidenced by the few investments 
made outside the more traditional military or airline projects. 

Another indication is their reluctance to commit full-time senior 
management or top technical personnel to these diversification ventures. 
Again, the statements of defense industry executives are revealing: 

"Diversification would dilute management's effort 
on the basic product line." 

4 

"Management believes that it should devote its 
energy and money to what we are doing and what 
we know how to do." 

The second set of reasons for lack of success at commercial diver¬ 
sification relates to the specialized capabilities of these government 
contractors. These firms—compared with commercially-oriented companies- 
have relatively low capitalization, little if any commercial marketing 
capabilities and limited experience in producing at high volume and low 
unit cost. Moreover their entire administrative structure is geared to 
the sometimes unique reporting and control requirements of the govern¬ 
mental customer. 

The low capitalization of the large defense corporations—the 
relatively small amount of stockholders' investment in relation to sales 
volume—is striking. A related problem is that the traditionally low 
price-earnings ratio of the stock of these companies limits their 
ability to diversify through merger. Since, their stock is so often 
selling at a discount compared to commercially-oriented companies, it 
is difficult for them to diversify through merger without diluting the 
equity of existing shareholders. 

The lack of commercial marketing experience is a familiar refrain 
in defense industry circles. One company president has stated that 
"it's not a merchandising industry." A typical comment of another chief 
executive evoked the same theme: 

"Lack of knowing the market prevents us from coming 
up with a salable product, even though we could 
compete with the established companies on a tech¬ 
nical basis." 

Because of the more specialized nature of military equipment 
there is less emphasis on volume production at low unit costs. Rather, 


472 


ACDA/E-156 


these firms are used to producing at close tolerances and high quality, 
under great pressure from the governmental customer to develop even 
more advanced equipment. Meeting that last one percent of military 
specifications may be very expensive, but essential. In contrast, in 
commercial work the company usually starts off with broader specifica¬ 
tions and then trades off continually between improving the product and 
lowering the cost. Thus, firms used to the environment of weapon 
system design and development may not have developed the cost orientation 
needed to perform and compete successfully in commercial markets. As 
one defense industry executive put it, ”Our company doesn’t know how to 
cut comers well enough.” 

A new model of refrigerator at half the price of current types 
may have a large market even if it suffers from significant reductions 
in quality. The second best missile, in contrast, may hardly be a 
bargain. The comparison of course is oversimplified. Nevertheless, 
it illustrates the different nature of product innovation characteris¬ 
tics of commercial competition as compared to technological competition 
in the military field. 

It is thus not hard to understand why defense company managements 
are so reluctant to move from fields they have mastered where they 
feel at home, into lines of business quite alien to them. Their lack 
of knowledge of nondefense industries is pervasive. It includes 
ignorance of products, production methods, advertising and distribution, 
financial arrangements, funding of research and development, contracting 
forms, and the very nature of the private customer’s demands. 

Clearly the type of company that can successfully design and build 
a new multibillion dollar ICBM network or space exploration system has 
a capability differing from that of the soap, steel, toy, or other 
typical cost-conscious but low technology company operating in the 
commercial economy. 

Even examinations of companies that have divisions producing 
weapon systems as well as commercial product divisions find little 
transference of either personnel or product ideas from government to 
commercial work within the same firm. A company’s commercial depart¬ 
ments may be hiring engineers, while simultaneously a military depart¬ 
ment may be laying off experienced technical personnel. 

Available surveys show that large proportions of the engineers and 
scientists who leave a company doing military work go to other firms 
similarly engaged on government contracts. There has been considerable 
movement of professional and technical personnel from universities and 
nondefense industries to government work, but relatively little 


473 


ACDA/E-156 


J 

* 

movement in the opposite direction. Diff srences in pay scales and 
degree of challenge in the work are oftej^cited as barriers to move¬ 
ment from government to commercial work. 

Hence the key resources of the military contractors—their 
management and their scientific personnel—tend to become locked-in 
and further dependent on the governmental customers. Each additional 
failure at commercial diversification and equally every successful 
governmentally-contracted undertaking serves to accentuate their 
locked-in nature. 

XII.7 ANOTHER APPROACH:. PUBLIC SECTOR MARKETS 

Defense contractors are still attempting to diversify their pro¬ 
ducts and markets. However, the more recent undertakings are based on 
a fairly fundamental reevaluation of their prospects and their cap¬ 
abilities. Such balanced appraisals of a company's or industry 1 s 
true assets and liabilities are made in relation to the tasks to be 
undertaken. For example, the seller 1 s lack of a vast distribution 
network is of little concern to the military customer which maintains a 
substantial system of supply depots of its own. The lack of mass pro¬ 
duction experience is of limited interest to a civilian space agency 
responsible for the design and development of relatively few numbers 
of new, scientifically advanced systems. Rather, the absence of these 
unneeded commercial-type capabilities may tend to keep overhead down 
and to orient the company to uniquely meeting the needs of its tra¬ 
ditional government customers. 

The large, specialized defense contractors do possess positive 
resources. Clearly, their engineering design and development capability 
is especially strong. The work forces of these companies often approach 
being primarily large aggregations of scientists, engineers, and support¬ 
ing technicians. Compared with the most technically-oriented industry 
serving commercial markets, such as drugs or chemicals, the typical 
defense company may have more than three times the number of scientists 


19 

William G. Torpey, Employer Views Toward Engineering Manpower 
Aspects of Defense Cutbacks," Personnel Journal . Vol. 48, No. 11 (Novem- 
ber, !968), pp. 792-795; and R. P. Loomba, A Survey of Unemploy ed Gradu- 
_g t _ e _ Engineers in the San Fr a ncisco Bay Area (San .Tose. r. a nwi,. g-, n 
Jose State College, May, 1964), pp. 1-18. 



11 w. 


J 

f 


474 






ACDA/E-156 


and engineers to support a given volume of end-item sales.The top 
managements of many of the leading aerospace companies, for example, 
are dominated by engineers—McDonnell-Douglas, Boeing, Lockheed, etc. 
Clearly, the specialized defense contractors possess strong capability 
to perform research extending the state-of-the-art, as well as preparing 
complex engineering designs. Related to that attribute is a management 
that is capable, some say uniquely capable, of managing the development, 
production, and integration of large and complex systems; this ability 
is often termed ''systems management." 

Similarly, these companies possess positive but specialized pro¬ 
duction capabilities. They are experienced at producing high value 
items incorporating advanced engineering and scientific design. A re¬ 
lated manufacturing asset is the ability to work with exotic materials 
and to close tolerances. 

Despite the numerous statements concerning their lack of marketing 
ability, these firms have been most successful in penetrating one large 
and rapidly growing market area—government business. In fact, they 
have experienced unparalleled success in selling complex systems involv¬ 
ing advanced technology to a select governmental clientele. Their 
knowledge of defense and space markets, customer requirements and public 
contracting procedures is detailed and often authoritative. 

Hence, a balanced appraisal does yield some positive strengths on 
the part of the major military contractors—their engineering and 
scientific talent for developing new products and services, their systems 
management capability, and their knowledge of how to serve government 
agencies. Thus, it is not surprising that the most recent diversifica¬ 
tion efforts of these government-oriented companies have been into 
newly-emerging, high technology markets within the public sector itself. 
Here there is little fear of competition from firms entrenched in the 
market, nor is there need for that elaborate merchandising and distribu¬ 
tion capability required for many commercial markets. Rather, here is 
where the government-oriented corporation may find itself at a strong 
advantage. 


20 

Calculated from data in National Science Foundation, Research and 
Development in Industry, 1966 , Surveys of Science Resources Series NSF 
68-20 (Washington: Government Printing Office, June, 1968), pp. 56 and 
74; and the corresponding document for 1967 (NSF 69-28), pp. 47 and 60. 

21 See John S. Gilmore and Dean C. Coddington, "Diversification 
Guides for Defense Firms," Harvard Business Review , Vol. 44, No. 3 (May- 
June 1966), pp. 144-157. 


475 







ACDA/E-156 


XII.8 DEFENSE COMPANIES AND PUBLIC SECTOR MARKETS 

From a national viewpoint, the utilization of defense/space 
capabilities in other parts of the public sector possesses considerable 
attraction. It would represent a useful civilian return on this primar¬ 
ily security-related investment and also would be helping to meet other 
national objectives. From the viewpoint of the individual company, 
such public sector diversification would reduce its dependence on two 
fairly closely related government markets—defense and space. Finally, 
by using the by-products of the basic defense/space product lines, the 
nation as well as the companies would be getting an added return on 
an investment which already has been made and has been written off. 

XII.8.1 The California Experiment 

One of the most ambitious efforts to utilize defense contractors 
and defense technology, certainly the most widely publicized program, 
consisted of four exploratory contracts awarded by the State of Cali¬ 
fornia in late 1964 and early 1965. The impetus for these contracts 
came from the reductions, in 1963-64, of military orders for large 
missile and related aerospace weapon systems, the mainstay of the 
state 1 s large defense industry. The plans were ambitious, particular¬ 
ly in view of the relatively small size of each contract—$100,000. 

The Lockheed Aircraft Corporation was chosen to design a state-wide 
information handling system and to develop a plan for its implementa¬ 
tion. North American Aviation was charged with developing a work 
program indicating the content and specifications for a systems 
approach to solving basic transportation problems. Aerojet-General 
Corporation received two of the contracts. One was to explore the feasi¬ 
bility of applying systems engineering and operations analysis techniques 
to social problems, and to recommend a program for prevention and 
control of crime and delinquency. The other was to assess the suitabil¬ 
ity of the systems approach and related analytical tools for solving 
California 1 s waste management problems and was performed by Aerojet’s 
subsidiary. Space General Corporation. 

Each of the companies spent more than $100,000 on the assigned 
study, thus investing some of their own funds into the effort. Thus, 
they also postponed to a later date the possibility of breaking even 
in this new area of business, much less earning a profit. Inevitably, 
a flow of reports resulted from the four contracts. The evaluations 
that have been made yield mixed results. 

There were several frequently voiced criticisms of the four 
studies. Some contended that they were weak in their knowledge of the 


476 





ACDA/E-156 


subject matter, as evidenced by incomplete or incorrect data, as well 
as inadequate knowledge of the pertinent literature or the state-of-the- 
art. Others maintained that the recommendations were politically naive 
and impractical to implement. Another complaint concerned the over¬ 
emphasis on engineering and^jnsufficient attention to social, political, 
and administrative aspects. 

The most basic criticisms related to the alleged naivete" of some 
defense industry personnel which led them to think that they could cipply 
the systems approach as readily to social, political, and economic 
questions as they had to military problems. As the president of one 
aerospace company was quoted as saying, "Creating a system to warn a 
field army the enemy has launched an attack of germ warfare is basicaj^y 
no different from creating a system to control juvenile delinquency." 

Apparently the four systems studies attempted to accomplish too 
much in too little time. Each of them tfus wound up in recommending 
that the state subsequently undertake follow-on programs, costing at 
least $1 million a year. To date, none of these follow-on programs 
have been implemented. This may be explained in part by the fact that, 
although the four contracts were paid for by the State of California, 
the program was financed to a substantial degree by funds that were 
Federal in origin. 

On the positive side, most of the publicity was favorable, if 
not uncritical. In his analysis of this particular aspect of the con^ 
tracts, John Gilmore concludes that "...the studies were successful." 
Harold Walt, who at the time was a senior California state official 
dealing with the four exploratory contracts, reported as noteworthy 
the fact that the state attracted the attention of industry to its 
problems and that industry thus also made the state aware of its 


22 John S. Gilmore, John J. Ryan, and William S. Gould, Defense 
Sy stems Resources in the Civil Sector , Prepared for the U.S. Arms 
Control and Disarmament Agency (Washington: Government Printing Office, 
ACDA/E-103, July, 1967), p. 43; and Elliot F. Beideman, State Spo,nsop_ 
ship of the Application of Aerospace Industry Systems Analyses for the__ 
Solution of Major Problems of California , Unpublished doctoral disserta 
tion, University of Southern California, 1966. 

2 \tell Street Journal , June 9, 1965, p. 1. 

2Zf John S. Gilmore, et al . , p. 40. 


477 


/ 










ACDA/E-156 


capabilities. It may be indicative of this new government-industry 
relationship that two of the companies that received contracts estab¬ 
lished offices in the state capital, which they did not have previously. 

As a result of the $440,000 expenditure by the state for the four 
initial studies and related consulting work, California has received 
about $1 million in Federal funds to support five additional systems 
studies. These cover a criminal justice information system, planning 
information for waste disposal, land-use planning data, and an examina¬ 
tion of public assistance systems. Some of these research funds were 
utilized by state agencies; the great bulk was contracted out to defense 
companies. 

In a more general way, all of the original contractors, as well as 
other defense firms, have expanded their civil sector systems activity 
since the completion of the initial California effort. Most are perform¬ 
ing work for a variety of state, local, and Federal government agencies. 
Aerojet received two additional contracts from the Statg^of California, 
but neither was a direct follow-on to its earlier work. 

XII.8.2 The Demonstration Effect 

At least the temporary cutbacks in military procurement in 1963- 
1964, and the demonstration effect of the California experiment, have 
encouraged many other defense contractors to seek business in the parts 
of the public sector they had previously ignored. Although the dollar 
volumes of these undertakings are still small judged by the scale of 
military and space programs, they do involve government agencies now 
doing business with high-technology private enterprises that were 
originally attracted to government work by the military establishment. 
Some nondefense firms have also begun to seek contracts in these newly 
emerging public sector markets. 

The present appears to be a period of substantial exploration on 
the part of both government agencies and business enterprises in assess¬ 
ing the kinds of relationships through which they can successfully do 
business with each other. Table 7 indicates some of the variety of 


25 

Harold R. Walt, "The Four Aerospace Contracts: A Review of the 
California Experience," in Applying Technology to Unmet Needs, Appendix 
Volume V. , Report of the National Commission on Technology, Automation, 
and Economic Progress (Washington: Government Printing Office, February, 
1966), p. 51. 

26 

John Gilmore, et al .,pp. 45-46. 


478 










ACDA/E-156 


recent contracts awarded by civilian government agencies to the 
government-oriented corporations. In most cases, these business- 
government relationships did not exist as recently as five years ago. 

It is, hence, too early to judge the successes or failures, or even to 
judge with great confidence the long-term trends that may be developing. 
However, on the basis of experience to date, four areas stand out as 
civilian public sector activities where the type of systems analysis 
and advanced technology possessed by the leading military-space con¬ 
tractors can usefully be involved: transportation* ? water systems, 
communications systems, and regional development. 

XII.8.3 Transportation 

Innovations in the area of transportation which have been consid¬ 
ered as potential endeavors for defense contractors include mass urban 
transportation networks, integration of existing surface systems, 
highway safety and traffic control, modernizing the merchant marine, 
and developing an alternative to the passenger automobile for personal 
transportation. In some of these cases, the most difficult barriers may 
not be technological at all, but rather political, social and institu¬ 
tional obstacles to change. 

A current example of innovative transportation work by a 
gover n ment-oriented corporation is the development by Lockheed Aircraft 
Company of a transportation plan for the Sudan. This work is being 
undertaken through contracts with the Agency for International Develop¬ 
ment and the Sudan’s Ministry of Finance and Economics. In its systems 
analysis of Sudan transportation, Lockheed is charged with developing 
a broad plan for development of all forms of transportation, indicating 
specific projects and establishing priorities among them. 

Within the United States, TRW, Inc., is conducting detailed 
engineering studies of transportation requirements for the Northeast 
Corridor. The Company is evaluating, for the U. S. Department of Trans¬ 
portation, alternative modes and travel concepts which can be used in a 
safe and convenient high-speed ground transportation network. 


27 Murray L. Weidenbaum, ’’Strategies for Diversification of Defense/ 
Space Companies,” in American Marketing Association, June 1967 Conference 
Proceeding**; and Aerospace Industries Association, Aerospace Technology: 
Creating Social Progress (Washington: The Association, 1968). 


479 









-Typical Civilian Public Sector Contracts Awarded in Recent 


ACDA/E-156 


CO 

u 

CO 

d) 

>* 


u 

o 

u 

u 

<0 

u 

u 

d 

o 

o 

0) 

u 

cO 

M 

O 

x 

u 

o 

u 


u 

o 

oi 

T“ 

X 

d 

CO 


M 

ai 


I 

73 

rH 

•H 

o 

44 

•H 

CO 

X 


3 


CO 


rH 

r* 


rH 


4-1 

00 

1*0 


(0 

d 

(4-1 

d 

d 


u 

c0 

CO 

p 

0 


d> 

a . 

M 

o 

Q 

X 

d 

•H 

o 

i 

1 

u 

a> 


M 

rH 

rH 

o 


0) 

*H 

rH 

rH X 

X 

T 

a x 

<3 


0) 

d 

a 

o 

Q 

o 

a 


0) 0) 

i I 

X O 

O O 

a 


0) 


I 

O 
O 
rH O 
•H M 
X 0) 
X <J 


44 

M 


d) 

0) 

3 

O 


3,3 


u 

o) d 

dl M 

*§) g 

as 


d d 
o o 

•H *H 

44 44 


73 

di 

0) 

s 

o 

o 

X 


73 TO 
dl 0> 
( 1 ) 0 ) 

s I 

o o 
o o 

XI X 


73 

<u 

44 dl 

CO x 
a 3 

rH U 

a) o 
S x 


d 

o 


ci 

a 


8 


CO 

<u 


co 

3 

73 

d 


d 

o 

44 

4J 


gj 
o 

•H 

4J 

cO 
M 
O 

a 

o 

cj 

a 
o 

M 

x 

u 
u 

§,2 


00 

c 

•H 

0) 


44 

4-1 

O 

0) TJ 
4i 
O 
X 
I 

o 
o 


w 


CO 

u 

0) rH 
d -H 
0) X 
O X 


d d 
o o 

*H -H 
44 44 









d 

d 

CO 

cd 




cO 







cd 

to 


di 







o 

o 

4-1 

4-1 




4-1 







4-1 

4-1 


B 


CD 

CD 

M 



•H 

•H 

V4 

u 



CD 

M 




44 



44 

44 


o 


0) 

<U 

O 



4-1 

4J 

o 

o 



4-1 

O 




O 



o 

O 


4J 


00 

00 

•H 

c0 


cd 

CO 

X 

X 


r 

4-1 

X 




•H 



X 

X 


0) 


o> 

d) 

M 

•H 

c0 

o 

o 

9 

CD 


cd 

d) 

3 




44 



3 

CO 


d 


rH 

rH 

d) 

X 

•H 

d 

d 

d 

d 


H 

3 

d 




dl 


d 

d 

d 


u 


rH 

rH 

4-1 

X 



X 

(0 

cd 


■4 

d 

co 




4-1 

dl 

o 

co 

cd 

o 



O 

O 

d 

rH 

*4 M 

w 

M 

u 


4 

X 

44 


4-1 

dl 

d 

o 

•H 

44 

44 

73 

rH 


O 

CJ 

M 

d) 




H 

H 

CO 

o 

o 

H 


d 

u 

M 

44 

44 

H 

H 

co 

CO 

<u 




X 

(44 

(44 

44 



i2 

44 

to 



Q 

•H 


dl 

cd 



44 

4J 

4-1 

• 

• 

MH 

4 

•H 

O 

O 

44 

44 

CD 

•H 

CD 

44 


Q 

44 

44 

Q 

44 

44 

4-1 

O 

d 

cO 

U 

u 

o 

rH 

rH 



O 

o 

CO 

rH 

CO 

O 


44 

4H 

O 

g 

O 

o 

O 

rH 

0J 

4-1 

*n 

*-) 


*H 

CO 

d) 

d> 



H 

CO 

eg 



dl 

O 


o 

X 



O 

g 

CO 



• 

X 

CJ 

o 

o 

• • 

• 


CJ 

a 

• 


> 


• 

CJ 

44 

• 

• 

CJ 

a 


CD 

VI 

4-1 

X 


•H 

•H 

4-1 

4-1 




4-> 



4-1 

4-1 


O 

4J 

4-1 


J-4 

X 

*H 

•H 

X 


4-4 

(44 

44 

X 

X 

44 

44 

44 

X 


(44 

CO 

X 

44 

CJ 

P« 

X 44 

d) 

M 

d 

d 

dl 

(H 

O 

44 

44 

0) 

d> 

o 

O 

O 

01 


o 

O 

di 

O 


dl 

01 

o 

> 

O 

o 

o 

Q 

o 


O 

O 

Q 

X 




X 



X 

X 


4-1 

X 

X 


o 


X 

X 



0) 





<u 

(0 

0) 



dl 



• 

CO 



d) 

o 




• 

4-1 

• 

• 

• 

• 

4J 

4-1 

U 

• 


4-1 

• 

• 

4-1 

3 

• 

• 

44 



• 

• 

CO 

U 

CO 

CO 

CO 

CO 

CO 

Cd 

cd 

cd 

CO 

X 

CO 

CO 

CO 

X 

s 

CO 

CO 

co 


<0 

4-1 

4-1 

t 

•H 

4-1 

• 

• 

• 

• 

4-1 

4-1 

4-1 

• 

w 

4-1 

• 

• 

dl 

0 

• 

• 

44 



CO 

CO 

D 

CJ 

CO 

X 

X 

X 

X 

CO 

CO 

CO X 

< 

CO 

X 

X 

X 

CJ 

X 

X 

CO 


44 

<u 

CM 

(d 

CO 

o 

4-1 

< 


00 

d 

•H 

rH 

d 

73 

a) 

d xi 
oo o 

•H CO 
CO 

a) 0 
X O 
o 

CO u 
3 CO 

x co 
co 


d 

oo 

•H 

CO 

01 

X 

44 

d 

to 

rH 

x 

d 

o 

•H 

44 

CO 

N 


§ S 

44 44 
CO 00 
>> 
CO CO 

d d 
o o 

•H -H 

44 U 

99 

o o 

4~l CM 

d d 


M 

0) 

4-» 

d 

d) 

O 

a) oo 
o o 

d rH 

0 ) o 
u d 
a x 
M-i a 
■v ai 

Pd H 


cj cj 


0 a § 3 

o o o o 

•H *H *H *H 
44 44 4-1 44 
CO CO CO cO 

o o o a 

d d d d 

3323 


d d 

o o 

•H *H 
44 4-1 

c 0 c 0 

4J 4.1 

O O 

x a 

3 3 

<d co 
M M 
H H 

73 73 
d d 
d d 

o o 
u u 
o o 

73 73 
( 1 ) 0 ) 
(0 dl 

x a 
co co 

X X 

oo oo 


§ § § 


X X w 


4-1 4-1 4-1 

CO CO 

►» >> >> O 

CO (O CO H 

d 0,0 «fl 

o o ' o x 

■H rl fH C 

44 44 U 01 

9 9 9 1 9 

O O O 4J <u 

<44 (4-4 CM 00 4J 

d a a S d 







4-4 

CO 







CO 

dl 



B 




44 

d 

44 

44 

dl 




o 

•H 

44 

x d 

44 



CO 

44 

00 

dl 

o 9 > 

CO 

B 


d 

•H 

d 

> 

44 B 


dl 


o 

<s 

w 

O 

4 cg X 

CO 

44 


•H 



X 

dl o 


CO 

44 

44 

44 

44 


CD rH 

d 

>> 

d 

co 

44 

44 

44 

dl dl 

o 

CO 

01 

o 

O 

O 

o 

& > 



B 


X 

X 


dl 

44 

44 

X 

d 

0 ) 

CO 

CD 


m d a 


cO 

d 

o 

•H 

4-1 




CO 

O 

•H 

X 

01 

a 


d 

m a 
a) ai 

4-1 00 

o 3 

rH 

a) u 

O Q) 

3 g 

X X 


<u 

> 

<D 

Q 


CO 

d 

o 

•H 

00 

(U 

X 


d -h 

90 CO CD 
H H rH 


O CJ 


CO 


rH 

d) 

U 

CO 

CO 


d d 
O O CD 
CD CD 0 

V4 U 53 

<V d) 4-1 
X X CD 
d d 5s 
CO CO CO 


480 



TABLE 7 (continued) 


ACDA/E-156 



rH 




o 

CD 




44 

55 




CJ 





CO 

o 




X| 

o 




44 

05 




c 


X 


rH 

o 

g 

44 

CO 

CO 

CJ 

cO 

CO 

X 

X 


CJ 

X 

CD 

(1) 

Q> 

13 -H 

o 

c 

g 

X 

C X 

X 

CD 

cd 

CO 

3 £ 


o 

o 

X 


< 

1 

1 

o 

l <! 


X 

X 



13 

<d 

0) 

q 

X ,G 

<D 

•r-) 

*T—) 

o 

X X 

X 

o 

o 

CJ 

CD X 

♦H 

X 

X 


(X O 

c 

<U 

cu 


CO 25 

G3 

<d 

<j 


x 

<D 

s 

o 

X I 
CO 
3 
CJI 


CO 
4-J I 

c 

<y 


Ml 

cu 

> 

O 

o 


c 

o 


CO 

4J 

X 

o 

(X 
CO CO 
*H G 
G CO 
X X 
O H 

44 

>> *H 44 
WHO 
*H cO 

cj cj . 

4J 

44 cx 
MOO) 
Q 
<D 

4J • 
CO CO 


O 

>* 


Q) 

2 CO p 


0) 

o 

> 

X 

QJ 

CO 

CO 

•H ,C 
G X 
>4 rH 
O CO 
44 0) 

*H ffi 
rH 

CO o 
CJ -H 

rH 
44 JD 

O 3 
(X 
Q) 

4J • 
CO CO 
4J 

CO JZ) 


TJ 

X 

O 

(X 

I 

o 

o 


& 

fX 


Q) 

O 

•H 

44 

44 

O 

4J 

CO 

O 

(X 


CO 


CO 


VJ — 

E Q 








a 

!G> 



G 




0) 

X 



o 



• 

X 

G G 



*H 



rH 

PH 

(1) O 



X 



cd 

0 X 



cO 




#s 

G 00 



X 



X 

X 

X G 



c x 



0) 

O 

QJ *H 



00 o 



X 

> JG 



*H p« 



e* 

o 

O CO 



CO CO 



cd 

<d 

o co 



CD G 



X 

co 



0 

Q CO 



o 




X 



6 

rH 

.. 14_| 


CD 

0 H 



i—i 

•H 

G O 


X 

CD 



•H 

> 

O 


CO 

X T) 



o 

•H 

x co 



CO G 



CJ 

00 <D 


CO 

>% G 



• 

G rH 



CO o 

X X 


CO 

<D 

*H *H 

X 

rH 

X 

G G 

X 


JG 

4C 44 

CJI 

O 

C O 

a) a) 

<D 

C 

X 

CO 

a> 

X 

o 

0 0 

13 

jG 


cd u 


X 

•H X 

<D 0) 

Cd 

o 

G 

£2 G 

JQ 

G 

x o 

00 00 

CD 

*“) 

•H 

w cd 

3 

o 

CO 44 

cd co 

05 




CO 

CJ 

X 

G G 






o 

X CO 
o CD 

££ 

a) 

13 

• • 

CO 




*H 

Cu G 

O 

w 




44 

CO *H 

a) cu 

CJ 

CJ 




44 

C Jp 

X X 


05 




CO 

cO X 

co co 

Pu 

GD 




X 

X G 

cd co 

♦H 

O 




H 

H H 

De ^ 

tS3 

CO 




481 





ACDA/E-156 


At the more specific product level, United Aircraft Corporation 
has built an experimental "Turbo Train" under sponsorship of the Depart¬ 
ment of Transportation, for the Penn-Central Railroad. Made mostly of 
aluminum and other lightweight materials, and powered by aircraft-tvpe 
gas turbine engines, the Turbo Train is designed to provide high-speed 
comfortable surface transportation to help alleviate the airport and 
highway^gongestion problems of the Northeast Corridor of the United 
States. Similarly, the Bell Aerosysterns subsidiary of Textron, with 
the assistance of funds from the U. S. Department of Housing and Urban 
Development, has developed an "air cushion" vehicle, the "Jet Skimmei " 
which is being used to take passengers from the Oakland and San Fran¬ 
cisco airports to downtown San Francisco across the Bay via a quick ^ 
water route in contrast to a lengthy drive on the California freeways. " 

The systems type of public transportation market in the United 
States appears to be in an early developmental state. The governmental 
funding generally is in terms of hundreds of thousands of dollars, 
characteristic of exploratory study phases, rather than contracts in 
units of tens of millions which are associated with actual production 
of operational systems. 

XII.8.4 Water Systems 

Suggested applications of defense industry science and technology 
to public sector activities in the water area vary from mining of the 
ocean floor to sea farming to salt and brackish water conversion on a 
commercial scale to effective water pollution control systems for 
entire watershed areas. In many instances there are important questions 
of benefit-cost analysis to be answered, particularly with regard to the 
allocation of the benefits and costs to specific groups and industries. 
Substantial obstacles to government action may be present, for example, 
in those cases where the cost of pollution controls is expected to be 
borne entirely upstream on a river, but where the benefits entirely 
accrue to residents in downstream localities. These are not simple 
questions nor are the solutions readily available. They may require 


28 

Paul W. Burton, "Testing the Turbo Train," United Aircraft 
Bee-Hive, Vol. 43, No. 2 (Spring, 1968), pp. 10-15. 

29 

Vertical World, August 1966, p. 5. 


482 







ACDA/E-156 


d us try deieSp^rrsiJnif Ican^degree^ bef ° re marketS f ° r in ~ 

. .. 3 less ^ ambitiou s level, several government-oriented corpora- 

ions (Aerojet General, General Dynamics, McDonnell-Douglas and United 
Aircraft) have been testing to determine whether waste water can be re- 
c aime t roug reverse osmosis” (filtering out impurities with thin 
membranes). The General Dynamics Corporation has been working with 
sanitation authorities in Los Angeles County and the City of San Diego. 
Westinghouse Electric Corporation is under contract with the Common¬ 
wealth of Pennsylvania to determine whether techniques used for de¬ 
salting water can be employed to purify acid mine drainage, a major 
source of stream pollution. 


As in the case of the public sector opportunities for innovation 
in transportation, the markets that have developed to date for water 
systems have been quite limited in terms of effective demand on the part 
of government agencies both willing and able to award large-scale con¬ 
tracts. Thus far, ‘the work undertaken largely has been limited to 
indicating some of the future potentials for diversification of defense 
contractors. 


XII.8.5 Communications 

Numerous specialized communications applications have been 
attempted on the part of companies now primarily working on defense 
contracts. A variety of potential public customers have been culti¬ 
vated here, including state, local and Federal governments, as well 
as foreign governments. 

Many defense contractors have obtained civilian government con¬ 
tracts in which modern computer technology is drawn upon to improve 
communication systems, notably in the areas of education, health, 
and justice. For example, Aerojet-General Corporation has been work¬ 
ing with the California Department of Education on a computer system 
for evaluating teacher credentials. This should reduce the time re¬ 
quired to review all teacher applications. General Precision Systems, 
Inc. is developing closed circuit, on-site telecasts for school via a 
mobile video control room. The mobile facilities can film, process 
the film, and broadcast the results to remote monitors. The McDonnell- 
Douglas Corporation has used its Automation Center to do the physical 
planning for the St. Louis Junior College District. By achieving more 
efficient space utilization patterns, the computer analysis yielded a 
100,000 square feet reduction in the proposed building plan and a cost 
saving of over 20 percent out of a $13% million construction budget. 


483 



ACDA/E-156 


The McDonnell Automation Center has done work for a variety of other 
public and private clients, including county, state, and federal 
agencies, hospitals, religious institutions, and companies in numerous 
manufacturing and service industries. 

At a more ambitious level, several'major defense contractors have 
set up new units to penetrate the public education field through teaching 
machines and related software. LTV, Inc. has acquired three business 
colleges to form a division of its new subsidiary LTV Education Systems, 
Inc., and to provide a proving ground for its computer-assisted 
instruc 
nology. 

Several defense contractors are actively attempting to develop 
improved communications systems for hospitals. TRW, Inc. did the 
systems analysis for a $100 million medical complex in Alberta, Canada, 
including designing and developing fully integrated communications, 
logistics, and information handling systems. The Mayo Clinic of 
Rochester, Minnesota, has retained the Lockheed Aircraft Corporation to 
study the speed of flow of medical information, seeking to free doctors 
from time-consuming routine. That company is also providing a computer¬ 
ized disaster casualty management system for the Texas Hospital Associ¬ 
ation. The University of California at Los Angeles has been using in 
its medical research a computer program originally created by North 
American Rockwell for use in solving a variety of rocket engine 
vibration and combustion problems. In the area of crime control, 

Northrop Corporation is under contract with the Commonwealth of Penn¬ 
sylvania to develop a criminal justice information system; this project 
began with a study of the requirements for a description of a recommend¬ 
ed information system and will go on to develop a plan for implementa¬ 
tion. 

30 

Saturday Review , Vol. 49, No. 30 (July 23, 1966), p. 35; McDonnell 
Automation Center, Automation: A Catalyst for Growth , (undated); Eli Gold- 
ston, "New Prospects for American Business,” Daedalus , Vol. 98, No. 1 
(Winter, 1969), p. 100; Business Week , No. 2057 (February 1, 1969), p.58. 

31 

Diversification News , Vol. 2,No. 4 (August 29, 1966), p. 1; 
Business Week , No. 1939 (October 29, 1966), p. 110; Boston Globe , 

November 27, 1966. 


J^on, automated teaching aids and other new educational tech- 


i 


484 










ACDA/E-156 


On a broader scale, defense contractors are designing state-wide 
communications systems designed to streamline the flow of information 
and reduce the continuous demand for personnel. Such systems are being 
developed for state governments of Alaska, California and West Virginia. 
It appears that the aerospace and electronics companies have been most 
successful to date in the new public sector markets involving computer 
technology and information-handling systems. In many cases the work 
contracted for goes beyond preliminary exploration to the actual 
installation of operational systems and equipment. 

XII.8.6 Regional Development 

The possibilities for applying defense industry technology and 
systems concepts to area or regional development are numerous and far- 
reaching. They range from technical assistance to developing nations 
overseas to urban renewal and redevelopment in our major metropolitan 
areas to conceptually as well as geographically new housing and community 
development projects ("New Towns" or "Satellite Cities"). Related 
alternatives include industry-operated educational and training centers. 

One of the most far-reaching attempts thus far to apply systems 
analysis to the economic development of a region was the contract with 
the Government of Greece under which Litton Industries committed itself 
not only to analyze and plan the growth of agriculture, industry, and 
commerce in an underdeveloped area (Crete and Western Peloponnesus), 
but actually to attract new investment to it. After 2^ years the con¬ 
tract was cancelled by the Greek Government as a result of its dissatis¬ 
faction with Litton's accomplishments. The company was to have 
received costs plus an 11 percent profit on its economic studies and 
1.9-2.25 percent of the equity capital or long-term foreign loans that 
it attracted to Crete or the Peloponnesus. Despite the ill-fated 
results of the Greek experiment, the Litton experience indicates the 
wide-ranging potential role of systems contractors in doing government 
business. Litton itself has entered into somewhat similar arrangements 
with Portugal and Turkey. Northrop Corporation has contracted with 
Iran to revamp irrigation and,transportation systems. 

t 

Within the United States, several defense firms have begun to do 
work in the urban field, an area of growing public concern. On a much 
less ambitious level, General Electric Company's center for advanced 
studies, TEMPO, is working with the City of Detroit to introduce 


32 "Twilight on Olympus," Forbes , Vol. 104, No. 11 (December 1, 
1969), p. 38. 


485 






ACDA/E-156 


budgeting techniques learned through its cost-effectiveness work on 
projects of the Department of Defense. That company also is involved 
with the University of Minnesota on an experimental city to be built 
near Minneapolis. 

Ten major government contractors (Aerojet-General Corporation, 
Control Data Corporation, Emerson Electric Company, Litton Industries, 
Ralph M. Parsons, American Cement Company, Northrop Corporation, TRW, 
Incorporated, Raytheon Company, and Lockheed Aircraft Corporation) 
formed a consortium early in 1968 to apply aerospace technology to 
urban problems. The organization, Urban Systems Associates, Inc., was 
directed by two retired Air Force generals and was launched with con¬ 
siderable publicity. However, it got off to a slew and shaky start. 

By the end of the first year, four of the companies had dropped out. 
Aerojet, Litton, and TRW decided to go it alone. Raytheon determined 
that it was not yet ready for the "urban" market, ^o specific under¬ 
takings by the consortium have yet been announced. 

In a more specific but no less ambitious way, the U.S. Office of 
Economic Opportunity has awarded Westinghouse Electric Corporation a 
special contract to develop a comprehensive prog^m to attack all the 
problems of a designated slum area in Baltimore. 

Several large companies have been operating Job Corps camps for 
the Federal Government's anti-poverty program. The General Learning 
Corporation, a joint venture of General Electric Company and Time, 
Incorporated, is operating a Job Corps Center in Clinton, Iowa. IT&T 
is operating the Center in Camp Kilmer, New Jersey and Thiokol Chemical 
Corporation the one in Clearfield, Utah. Philco-Ford is cooperating 
with the University of Oregon to manage the Job Corps installation in 
Astoria, Oregon. In a somewhat related effort. General Dynamics 
Corporation, Litton Industries, and Westinghouse Electric Corporation 
are running Peace Corps training stations in the United States. For 
example, General Dynamics leased a Girl Scout Camp near San Diego to 
use as a center where Peace Corps trainees are learning Hindi and 
farming techniques before going to rural villages in India to help 

33 

William H. Gregory, "Several Firms Planning Urban Programs, but 
Sales Prospects are Vague," Aviation Week , Vol. 89, No. 1 (July 1, 1968), 
p. 38 et ff. 

3 A 

Monroe W. Karmin, "Great Society, Inc.: U.S. Seeks to Expand the 
Role of Industry in Tackling Urban Ills," Wall Street Journal , December 
15, 1967, p. 1. 


486 






ACDA/E-156 


increase agricultural yields. 35 

In view of rising national concern with the complex of racial and 
poverty problems that are centered in the major urban areas, it is likely 
that the relatively small undertakings just described will in coming 
years grow into large-scale government utilization of private industry. 
Already, many public and private figures have urged the formation of 
new forms of government-industry partnerships in order to rebuild in a 
fundamental way major portions of the central cities of our largest 
metropolitan areas. 

One of the most promising ventures in the urban area is the work 
of the RAND Corp. in New York City. After sixteen months of work in 
applying systems approaches to such city services as fire, police, 
housing, welfare and health care, RAND and New York City formed the 
New York City-Rand Institute, a non-profit corporation designed to 
support and enlarge the effort. The city will provide $3 million per 
year and efforts will be made to raise additional funds from private 
foundations. RAND has also received a $360,000 contract from the Depart¬ 
ment of Housing and Urban Development to develop systems approache^f or 
city governments to apply in the provision of municipal services. 


XII.9 GOVERNMENT ASSISTANCE ALTERNATIVES 

Numerous ways have been suggested whereby the Federal Government 
could assist defense contractors in applying their capabilities in 
other areas of the economy. Most of these alternative approaches 
would involve several controversial questions of public policy. The 
alternatives analyzed here are 1) subsidizing these companies to under¬ 
take research and development work in nondefense areas, 2) awarding 
them procurement contracts in newly-established or expanded civilian 
public sector activities, 3) allowing them to charge some commercial 
product planning to their defense contracts, and 4) raising the profit 
levels on defense contracts to provide increased corporate funds for 
investment in diversification efforts. 


35 

"Business Teaches the Peace Corps,” Business Week , No. 1938 
(October 22, 1966), pp. 133-138; St. Louis Post-Dispatch , October 20, 
1966, p. 8A; John McHale "Big Business Enlists for the War on Poverty," 
Trans-Action , Vol. 3, No. 4 (May-June, 1966), pp. 3-9. 

Monroe W. Karmin, "Housing the Poor," Wall Street Journal , 
February 5, 1969, p. 1. 

/ 3 ^"Rand Sticks with New York," Business Week , No. 2071 (May 10, 
1969), p. 112. 


487 








ACDA/E-156 


XII.9.1 Subsidizing Non-Military R & D 

Many defense industry executives are reported to believe that 
if the Federal Government would award their companies large amounts of 
nondefense R & D contracts this would help to utilize effectively the 
engineers and scientists who would become available as individual 
defense programs phase out and/or if an overall cutback occurs in 
military spending. It is also contended that such action would con¬ 
tribute to maintaining the technological base that would be required 
by another upturn in military requirements. 

However, government-funded R & D leading to commercial products 
might be construed as unfair competition to the established commercial 
companies. In contrast, some contend that such contracts, given the 
prior experience of the defense companies, may become ''dead end" in 
nature. Some industry executives have warned against a "technological 
WPA," that is, R & D with no likely follow-on production. 

An examination of government assistance programs to private 
industry in other circumstances yields other suggestions for inc^gasing 
the nondefense demand for the R & D capability of defense firms. One 
such approach is a tax rebate for commercial R & D, similar to the tax 
credit for business investment in producers 1 durable equipment. This 
is separate from and would be in addition to existing write-offs of 
R & D costs as a deductable expense. 

Another approach is some form of joint industry-government financ¬ 
ing of commercial R & D, along the lines of the mineral exploration 
program of the U.S. Department of the Interior. Under this arrangement, 
the Federal Government pays up to one-half of the cost of exploration 
and is reimbursed out of any proceeds that may result. Under a 
"scientific" exploration program, the repayment could take place if 
the R & D leads to profitable production. 

Another method of Federal assistance to these commercial product 
development efforts is long-term loans and loan guarantees; these would 
be comparable to the existing housing, small business, and V-loan pro¬ 
grams. Also, existing but idle government-owned plant and equipment 
can be leased for nondefense R & D work. The terms could be made 
favorable enough to encourage the private companies to embark on these 


38 

Murray L. Weidenbaum, "The Transferability of Defense Industry 
Resources to Civilian Use," in Roger E. Bolton (ed.), Defense and Dis¬ 
armament; The Economics of Transition (Englewood Cliffs, New Jersey: 
Prentice-Hall, 1966), pp. 110-111. 


488 






ACDA/E-156 


risky undertakings. Finally, technical assistance could be supplied 
to these companies to show them how their scientific and engineering 
skills could be utilized in nonmilitary work. 

XII,9.2 Nondefense Procurement Programs 

The federal Government, alternatively, could embark upon new or 
stepped-up nondefense procurement programs. The suggestions that have 
been made cover a wide array of activities: transportation systems, 
medical electronics, nutrition, oceanography, communications systems, 
and housing. 

Expenditures of this type would help to meet unfilled needs in the 
public sector of the economy. They also would help to offset deflation¬ 
ary tendencies that would result from cutbacks in defense purchases. 
However, they might not generate significantly large requirements for 
the R & D and other unique capabilities of defense firms. Also, such 
increases in government spending would mean foregoing the opportunity 
either to increase some other area of the budget or, conversely, to 
reduce the role of the government in the American economy. 

XII.9.3 Charging Commercial Planning Work to Defense Contracts 

The Armed Services Procurement Regulation already provides for 
treating as an allowable cost on defense contracts an applicable portion 
of reasonable ’’costs of generalized long-range management planning 
which is concerned with the future over-all development of the contrac¬ 
tor’s business and which may take into account the eventual possibility 
of economic dislocations or fundamental alterations in those markets in 
which the contractor currently does business.” However, research and 
development and engineering costs designed to^ead to new products for 
sale to the general public are not allowable. 


39 

U.S. Congress 88th Congress, 2nd Session, Convertibility of Space 
and Defense Resources to Civilian Needs: A New Search for New Employment 

Potentials , Vol. 2 of Selected Readings in Employment and Manpower Com¬ 
piled for the Subcommittee on Employment and Manpower of the Committee on 
Labor and Public Welfare, U.S. Senate, Committee Print (Washington: 
Government Printing Office, 1964), Parts V and VI. 

^Report of the Committee on the Economic Impact of Defense and 
Disarmament (Washington: Government Printing Office, July, 1965), p. 40. 


489 












ACDA/E-156 


If the regulation were liberalized to permit treating some com¬ 
mercial product planning as an allowable cost on defense contracts, 
that would provide an incentive for defense companies to devote a 
portion of their energies to commercial diversification. However, this 
too might be considered to constitute unfair competition to nondefense 
firms. The proposed "National Economic Conversion Act," which was intro 
duced in the Congress in March, 1969 by a bipartisan group of senators 
and congressmen, would require every significant defense contractor to 
"define his capability for converting manpower, facilities, and any 
other resources now used for specific military products or purposes, 
to civilian uses," 

The conversion bill is somewhat similar to legislation which was 
introduced to help deal with the adverse economic impacts of the 1963- 
1964 defense cutbacks. The latter legislation was not enacted. The 
current version applies to all firms holding military and atomic energy 
contracts where the resultant employment is more than one-fourth of the 
firm's work force. 

The currently proposed conversion legislation also would set up 
a National Economic Conversion Commission to develop government policy 
on adjusting to defense cutbacks and to convene a National Conference 
on Industrial Conversion and Growth. 

XII.9.4 Raising Profit Rates on Defense Contracts 

Improving the profitability of defense contracts would provide 
increased corporate funds for investment in diversification efforts. 

This would constitute a minimum intervention approach by placing the 
initiative in the hands of the companies directly affected. Defense 
companies under this approach would be in a stronger financial position 
to deal with problems of adjusting to declines in military expenditures. 

However, these additional funds might be devoted either to invest¬ 
ments in the military market itself or merely to increasing the dividend 
rate to share-holders. In view of the often unsuccessful record of 
commercial diversification efforts by defense contractors, the effective 
ness of government funds devoted to encouraging additional efforts of 
this nature might be very limited. 

Also, as reflected in conventional economic theory, increasing 
the profit rate of a sector of an economy would not tend to reduce the 


490 


/ 



ACDA/E-156 


resources in it. On the contrary, such action would serve as an 
incentive to business firms to increase their commitments to defense 
work. Higher profits also would encourage additional firms to attempt 
to enter defense work. A reduction in the profitability of defense 
business might be more likely to encourage business firms to shift 
resources from defense to nondefense opportunities. 


491 


ACDA/E-156 


ORGANIZATIONAL AND ADMINISTRATIVE FACTORS AFFECTING 
SHIFTS IN DEFENSE EXPENDITURES! 


Graham T. Allison 


XIII.1 INTRODUCTION 

Economics has developed a powerful set of tools for analyzing 
alternative allocations of resources, and distinguishing preferred 
choices. The techniques variously labelled as systems analysis, cost 
benefit analysis, operations research, PPBS (Planning-Programing- 
Budgeting System), etc.,2 permit at the initial level a useful, intui¬ 
tive structuring of complex problems of choice. At further levels of 
sophistication, these techniques now permit exceedingly refined 
analyses. By clarifying objective functions, specifying various con¬ 
ceivable alternatives (for doing well in terms of an objective func¬ 
tion) , and estimating the principal consequences of the alternatives in 
output categories, such analyses yield a menu of preferred, analytical¬ 
ly-specified alternatives. The introduction of PPBS into departments 
of the U.S. government (and a number of state and city governments as 
well) has had an important rationalizing effect: 

1) making government heads consider what outputs they are trying 
to achieve and how expenditures relate to these outputs; 

2) encouraging comparisons among alternative programs; 

3) facilitating identification of gaps at the system level; and 

4) distinguishing preferred choices. 

What is most striking, however, is the extent to which the actual per¬ 
formance of government units differs from the alternatives which analy¬ 
sis shows to be preferred. This difference we shall label an "analysis 
gap. 


It is no doubt true that among the contributors to this "analysis 
gap" are the absence of systematic analysis of alternatives, insuffi¬ 
cient attention to existing analyses, stupidity, and avarice. But if 


Elisabeth K. Allison and Janet L. Shur have contributed signifi¬ 
cantly to this document. 

2 

While hard distinctions can be drawn among these various techni¬ 
ques, the distinctions are not important for present purposes. 


492 



ACDA/E-156 


attention is limited to problem areas in which analysis is done, read, 
and assimilated, the divergence is still considerable. The causes are 
not too obscure. First, from whence is the objective function employed 
in an analytic study derived? Most often analysts assume a function 
consonant with their own preferences, or with the preferences of "most 
reasonable men," or with the preferences of the relevant citizenry. But 
nothing is clearer in the study of politics than that individuals impor¬ 
tantly affected by the outcomes of public policy differ sharply over 
preferences. Indeed, the best aphoristic definition of politics is: 

"who gets what, when, and how." Second, what is the choice mechanism 
in the case of important decisions about alternative allocations of 
government funds? Obviously, it is no unified, rational agent but 
rather some component of a political system. Third, in the determina¬ 
tion of outcomes (as opposed to the selection of preferred analytic 
choices) what is the source of the inputs to choice (i.e., information, 
alternatives, etc.) and what is the mechanism for the implementation of 
chosen alternatives? In the business of government, most inputs and 
most implementation are determined largely by the processes of large 
organizations. While the first two sources; of the gulf between prefer¬ 
red analytic alternatives and actual governmental policy outcomes are 
worthy of examination, the purpose of this essay is to explore the 
third set of organizational and administrative factors as they do affect 
outcomes—and as they should affect the analysis of preferred outcomes. 

In order to facilitate our exploration, it will be useful to set 
in boldface a distinction which has already been used, but which may 
not have been noticed: the distinction between alternatives and out¬ 
comes . An "alternative" is an analytically defined option consisting 
of a cluster of variables (and their values) that refer to a possible 
state of the world. An "outcome" is a selective description of an 
actual state of the world, i.e., a selective list of variables (and 
their values) that refers to an actual existing state of the world. 

Using this distinction, we can formulate our problem more clearly. In 
attempting to clarify problems of choice, analysts first specify 
"alternatives." For example, the larger study specifies various alter¬ 
native uses of the military, like Project 100,000. The list of such 
alternatives relevant to a problem area is limited both by the ana¬ 
lyst^ imagination and by physical facts like the laws of thermo¬ 
dynamics. Within such boundaries, however, the alternatives generated 
by analysis can be very rich indeed. Second, analysis attempts to es¬ 
timate what costs and what benefits will be associated with each spe¬ 
cific alternative. Finally, by comparing inputs and outputs, analysis 
discovers a preferred choice. What such analyses neglect, however, is 

the likelihood that an alternative, once chosen, will be realized. 
Indeed, unrecognized but implicit in such analyses seems to be an asr 
sumption that choice is the equivalent of pushing a button on a machine 


493 







ACDA/E-156 


which translates the alternative into an outcome that exhibits the al¬ 
ternative’s costs and benefits. This essay will treat the mechanism 
that links analytic alternatives and actual outcomes and will attempt to 
shed some light on why governmental performance departs so dramatically 
from analytically preferred alternatives and on how analysts might be¬ 
gin to influence some of the factors that cause this divergence. 

In a nutshell, the contribution of this essay to the larger eco¬ 
nomic study of which it is a part can be summarized as a reminder: the 
actual realization of analytic policy alternatives tends to be hampered 

by failure to consider vital organizational and administrative factors . 

For example, consider U.S. defense expenditures. Under Robert 
McNamara’s tenure as Secretary of Defense, Defense Department officials 
maintained that dollars were allocated among and within program packages 
after systematic analysis of the effectiveness of marginal dollars in 
achieving specified objectives. Choices about the allocation of funds 
to any program package, e.g.,, strategic offensive weapons or general 
purpose forces, or to projects within any program package, e.g., 
Minuteman missiles as opposed to Polaris, reflected judgments about 
relative effectiveness without reference to the organizations (Army, 

Navy and Air Force) which would actually procure and man various weapon 
systems. In terms of this picture, what would one expect about the 
division of defense funds among the Service branches? Given the extra¬ 
ordinary changes in world conditions over the 1960’s, and the introduc¬ 
tion of hundreds of new hardware items, one should expect considerable 
variation in the percentage of the defense pie given to each of the 
Services. But as Table 1 suggests, until the Vietnam buildup, the 
Service shares remained remarkably stable. (Note: the Services always 
permit the Army’s budget to expand in times of war and force it to con¬ 
tract thereafter.) 

The Department of Defense budget is prepared analytically in pro¬ 
gram packages (See Table 2); dollars for these packages are authorized 
and appropriated by Congress in titles (See Table 3). Again, what 
would one predict about the relative stability of the division of funds 
within each of the tables? As comparison of Tables 1-3 suggests, the 
Service shares remain considerably more stable than the appropriation 
titles and the appropriation titles are more stable than the programs. 

In fact, the Service stability is reflected in both the authorization 
and the program budgets, since these figures reflect the final budget 
rather than analysts' preferred allocation among program packages. As 
a predictor of the path of defense expenditures, expenditure categories 
that are organizationally grounded are to be preferred to the budget¬ 
ary categories in which analysis is done. 

While these aggregate figures are merely suggestive, the relative 
stability of the service split does nonetheless suggest the importance 


494 





ACDA/E-156 


rO 

G 


o 






















•H 

4J 

g 


^5 






m 

rH 









00 

in 



rH 



CN 

vO 

o 


CO 

m 

vO 

CN 

00 


o 

av 

CN 

<3- 

m 

rH 


CO 



G 


u 

• 

o 

• 

oo 

• 

• 

CN 

• 

#» 

vO 

O 

• 

O 

• 

rH 

• 

av 

• 

CN 

• 

vO 

• 


ev 



S 


4-1 

OV 

o 

<N 

CN 




<3- 

OV 

O 

CO 

CN 

CO 








CO 

Q 

rH 

rH 






-CO- 

rH 

rH 






</> 



m 

CO 

CN 


G 


S'? 






00 









o 



1 

Q 








CN 


S'? 







av 




00 


O 


CN 

oo 

vO 


CN 


o 

o 

O 

CO 

m 

rH 


r>- 



<3 


G 

rH 

• 

• 

• 

• 

• 



ov 

• 

• 

• 

• 

• 

• 


#\ 



Pn 


4-> 

VO 

o 

co 

00 

m 

CN 

1 

CO 

vO 

O 

CN 

av 

CO 

m 



r-- 




G 

On 

o 

CN 

CN 





ov 

O 

CO 

CN 

CO 






ev 


<13 

rH 

rH 






-co- 

rH 

rH 







-co- 



N 


U 



















3-4 


P-4 




















G 


G 








m 









co 



rH 


P-i 







rH 


S'? 







r*- 



rH 


1 


o 

00 

CN 

CO 



CN 


o 

vO 

m 

co 

m 

rH 


CO 



O 


1 

O 

• 

• 

• 

• 

• 



00 








ev 





G 

VO 

O 

CM 

00 

vO 

CN 

1 

rH 

vO 

o 

CN 

00 

CO 

m 



r^. 



4J 


rC 

OV 

O 

CN 

CN 




<3- 

av 

O 

CO 

CN 

CO 




f'-. 



a 


u 

rH 

rH 






-CO- 

rH 

rH 







-co- 



0 


G 




















O 


cd 




















u 


3-i 








CO 












'w' 


PQ 


&>2 






CO 


S'? 







vO 





<13 


O 

O 

<* 

CO 

CO 


CN 


O 

rH 

m 

av 


rH 


vO 

• 


G 


OV 

• 

• 

• 

• 

• 


rv 

r>- 









O 


W 


O 

m 

O 

CO 

00 

vO 

CN 

1 

rH 

vD 

O 

rH 

00 

co 

vD 




r"- 


G 



ON 

o 

CN 

CN 




<3- 

av 

o 

CO 

CN 

co 




vO 

av 


G 


> 

rH 

rH 






-CO- 

rH 

rH 







-co- 

rH 


4-1 


Pj 


















i 


G 


03 


















00 


Q 


CO 








CN 









av 

vO 












vO 


S'? 







o 

av 


4-1 


So 


o 

CN 

Ov 

CN 



O 


o 

CO 

<3- 

o 

rH 

CN 


<3- 

rH 


O 



00 







#\ 

v£> 

• 

• 

• 

• 

• 

• 


#v 






m 

o 

CO 

r-- 


rH 

1 

Ov 

vD 

o 

f"» 

av 

r-- 

vO 



<3- 



Po 


03 

Ov 

o 

CN 

CN 




CO 

av 

o 

CN 

CN 

CO 




m 

fH 


3-4 


>V 

rH 

rH 






-CO- 

rH 

rH 







<o- 


G 


cd 




















4-1 


i-H 


















• • 

• 

G 


4-> 








Ov 









co 

w 

w 

3-i 










CO 


S'? 







r>. 

Po 

rH 

a 


o 


O 

v£> 

rH 

00 

VO 


<r 


O 

rH 

o 

m 

CN 

CN 


rH 

G 

G 

G 



r^- 

• 

# 

• 

• 

• 



m 

• 

• 

• 

• 

• 

• 


0\ 

rH 

4-J 

CO 


X> 

m 

o 

CO 



rH 

1 

00 

vD 

o 

m 

av 

av 

vO 



vO 

4-J 

o 



G 

OV 

o 

CN 

CN 




CO 

av 

o 

CN 

CN 

CO 





G 

4-J 

4-J 


cd 

rH 

rH 






-co- 

H 

rH 







-CO- 

O 


G 





















O 

G 


03 


















• rv 

4-J 

4-J 


03 








rH 









o 



C/3 


3-4 








Ov 


S'? 







vO 

vO 

r d 

•H 


G 


o 

CO 

CN 

00 

r-v 




O 

CN 

CN 

CN 

CN 

CN 



av 

x) 

C/3 


-ut 

vO 







r\ 

•<3- 








rv 

rH 

G 

CO 

• 

•H 

m 

o 

<r 


vO 

rH 

1 

m 

vO 

o 


av 

rH 

m 



av 

1 


<3 

x> 

T3 

ov 

o 

CN 

CN 




co 

av 

o 

CN 

CN 

<3- 





m 

4-J 


G 

a 

rH 

rH 






-co- 

rH 

rH 







<o- 

m 

o 

G 

CO 

0) 


















av 

G 

42 

CO 

a 


















rH 


4-J 

G 

X 








CN 









CN 


Po 


a 

w 








CO 


S'? 







m 


G 

4-4 

o 


O 

O 

■<r 

CN 

<3- 


m 


O 

00 

o 

oo 

av 



CN 


0 

O 

3r4 

03 

m 

• 

• 

• 

• 

• 



CO 











CL, 

0) 

m 

o 

m 

r"» 

vO 

rH 

1 

m 

VO 

o 

CO 

av 

CN 

CO 



00 


rH 

G 


G 

av 

o 

CN 

CN 

<r 



CO 

av 

o 

CN 

CN 

<3- 




<r 

• • 

•H 

O 


03 

rH 

rH 






-co- 

rH 

rH 







-CO- 

C/3 

G 

•H 

av 

4-4 


















03 

4-J 

4-4 

vO 

03 






03 








C/3 




3-r 

03 

4-1 

av 

Q 






03 


03 






03 


CO 


G 

TJ 

O 

l—1 







•H 


G 






•H 


G 


4-1 




4-4 






a 

03 

o 






<J 

03 

O 


•H 

XJ 



o 






G 

03 

•H /-N 






G 

C/3 

•H 

N 

T3 

G 

• • 








03 

G 

rH 03 






03 

G 

rH 

C/3 

G 

X) 

P3 


4-J 






4 ? 

03 

rH 3-1 






00 

03 

rH 

3-4 

G 

G 

u 


c 





03 

4H 

•H rH 


/'“N 



03 

<3 

4-4 

•H 

G 

P. 

G 

Cr3 


03 





a 

03 

0 G 


S'? 



a 


03 

0 

rH 

X 

O 

P=> 


g 


'—*• 



u 

0) 

a 

w rH 





u 

03 

Q 

Sw/ 

rH 

W 

Ptf 

O 


u 





o 

0) 


O 





o 

C/3 



O 

G 

4=1 

CO 


u 


M 



Ph 

G 

rH 

rH X> 


rH 



Ph 

G 

rH 

rH 

T) 





cd 


cd 

SO 

pn 

03 

•H 

G 


G 


^v 


03 

♦H 

G 






Cl, 


■P 


> 

u 

4-1 

> 

4-J 4H 


4J 

8 

> 

u 

4-4 

> 

4J 

4-4 





03 


o 

c 

G 


03 

•H 

o o 


O 

C 

G 

•H 

03 

•H 

O 

O 





Q 


H 


S3 

<3 

a 

U 

H 


H 

«3 


< 

Q 

QJ 

H 







495 










ACDA/E-156 

I 


CN 

fa 

fa 

PQ 

<3 

H 



vO 

tN> 












ON 


X 

O 

on 

O 

X 

X 

X 

X 

rH 


X 

rH 


<r 


cr> 

• 










• 

• 

<r 


rH 

O 

ON 



CM 

X 

r^* 

O' 

rH 

CN 

X 

o 

#V 



o 


<r 






rH 



1 

X 



rH 












VO 


£ 













-cn- 

03 















G 















o 
















m 













r>» 

X 

x> 

o 

X 

X 

00 

X 

00 

X 

X 

X 

X 

X 

o 

X 

3 

cr> 













vD 

XI 

rH 

o 

X 

r— 

CO 

CM 

X 

O' 

o> 

rH 

X 

CM 

rH 


•H 


o 

rH 

X 






rH 



1 

o 

x 


rH 












X 

X 

£ 













</> 

cn 















•H 















Q 















03 















GO 

X 

o 

Csl 

rH 

<t 

CN 

CO 

O' 

o 

O' 

X 

X 

X 

r^- 

G 

ON 

• 










• 

• 

CTv 

x 

rH 

o 

X 

X 

00 

CN 

X 

O' 

CO 

o 

CM 

CN 

rH 


a 


o 

rH 

X 






rH 



i 

O 

03 

fH 

rH 












X 

O 

£ 













cry 

X 















03 















fa 















1 

X 













00 

1 

X 

o 

X 

rH 

X 

CN 

<3- 


r-* 

ON 

CM 

X 

X 

o 

4 

6 

cr> 













CN 

rH 

o 

o 

X 

r- 

CN 

X 

O' 


ON 

CM 

X 

rH 

* 

G 


o 

CM 

X 









1 

rH 

X 

pH 

1—1 












X 

00 

fa 













cry 

o 















X 















fa 















:>> 

CN 













rH 

XI 

X 

O 

X 

X 

X 

rH 

X 

X 

X 


rH 

CO 

X 

<r 


O' 















rH 

O 

CM 

X 

X 

CN 

X 

X 


O' 

CM 

X 

rH 


4-1 


O 

CN 

X 









i 

o 

•H 

pH 

rH 












X 

x 

fa 













cry 

o 















X 















4-4 















G 















<3 


/-N 




























fH 


V-/ 



G 




03 






cd 





o 




a 


XJ 


cn 


C 





•H 




G 


03 


03 

P^ 

O 


X 



X 




G 


X 


o 

X 

*H 


*H 



cd 




G 


G 


•H 

•H 

4-1 


X 



o 




03 


•H 


> 

X 

G 


O 



*H 


cn 

X 

X 


a 

cn 

X 

O 

00 


X 



G 


03 

G 

G 

• 

o 

G 

03 

fa cn 

•H 


4-1 


cn 

G 


a 

03 

*H 

o 

cn 

O 

cn 

X X 

rH 




03 

g 


X 

0 

G 

X 

cn 

•H 


G G 

X 


< 


o 

§ 


o 

fa 

S 

0) 

< 

X 

X 

<3 rH 

o 




X 

O 

X 

fa 

O 




G 

G 

rH 



rH 


o 

CJ 

X 


rH 

XJ 


x> 

Z 

03 

rH O 

rH 


cd 


fa 


•H 

03 

03 

G 

rH 

G 


X P^ 

G XJ 

03 


G 

cn 


XJ 

r—1 

P> 

> 

G 

G 

G 

X 

X G 

G 

X 


o 

03 

03 

G 

cd 

X 

03 


a 


03 

G fa 

O fa 

o 



a 

cn 

G 

03 

03 

Q 


•H 

C 

fa 

V 

•H O 

H 


4-4 

x 

o 


cn 

cn 


rH 

XJ 

o cn 

X 

X 

X 



o3 

o 

fa 

03 


03 

XJ 

fa 

03 

*H 03 

o 

G 

G cn 



00 

fa 

X 

a 

XJ 

fa 

G 

fa 

s 

X *H 


1 03 

00 G 



•H 



G 

G 


cd 

G 


G x 

fa 

0 

•H O 



T—1 

o 

fa 

0) 

cd 

X) 


cn 


X -H 

O 

03 

tH *h 



X 

*H 


00 


G 

fa 


00 

X > 


XJ X 

fa rH 



o 

00 

rH 

•H 

X 

cd 

a 

rH 

G 

CD *H 

X 

03 *H 

O rH 




03 

cd 

rH 

X 


X 

G 

•H 

*H X 

X 

no X 

•H 



rH 

X 

X 

rH 

•H 

TJ 

cd 

X 

G 

G O 

O 

G 03 

iH g 



cd 

cd 

03 

03 

rH 

X 

03 

X 

•H 

*H <3 

fa 

G fa 

G 



4-» 

X 

c 

X 

X 

cd 

cn 

G 

G 

0 

fa 

fa 

X 



O 

X 

03 

G 

*H 

G 

03 

03 

X 

X) 

G 

G 

O 



H 

cn 

o 

M 

<i 

O 

fa 

CJ 

H 

<3 

cn 

fa 

H 




«H 

CM 

X 


X 

X 


00 

CT> 

o 

rH 













496 









TABLE 2 (continued) 

(est.) 

__ FY 1967 FY 1968 FY 1969 FY 1970 FY 1971 

Total Obligational Authority (%) 100.0% 100.0% 100.0% 100.0% 100.0% 


ACDA/E-156 




Oh 

oo 

CN 

O 

<r 


VO 

CO 

rH 

CO 

rH 


• 

• 

• 

• 

• 

• 

• 

• 

• 1 

<r i 

rH 

Oh 

o 

CO 

r>- 

CM 

CO 


pH 


CM 

r\ 

rH 

cn 

i—i 

CM 

CM 

CO 

CO 

*H 

CM 

rH 

Oh 

Oh 

CM 

r^- 

-c/y 

uo 

CO 

O 












Oh 

hO 


CM 

CO 

vO 

CM 

vO 

rH 

<f 1 

r"» 


CO 





rH 

iH 


r>. 

</> 


00 

hO 

CO 

o 

r-^ 

Oh 

00 


hO 

vO 

1 

1 

CM 

CO 

O 

00 


CM 

CM 

m 

pH 

UO 

rH 

CO 


i—I 

CO 





rH 

rH 



Oh 

r^. 

</> 


Oh 

CM 

<r 

<r 

rH 

oo 

r^. 

O 


rH 

CO 

v£> 

rH 

Oh 











00 

CM 


CM 

Mf 

uo 

o 

CO 

rH 

CO 

O 

*\ 

Oh 

•<r 

CO 

UO 


uo 

rH 

vl> 

rH 

CO 

00 

CM 

1 

UO 

vO 

r- 

<s> 

CN 

<r 












o 

Oh 

CO 


CM 

co 

vO 

o 

CM 

rH 

CO 

o 

#v 


<r 





r-l 

rH 



1 

CO 

r- 

</> 




d 




<D 










o 




CJ 


X) 


cn 






•H 




d 


0) 


CD 


Po 




P 




cd 


4-J 


o 


4-J 




cd 




d 


cd 


•H 


•H 




a 




<D 


*H 


> 


d 




•H 


cn 

4-J 

P 


O 

cn 

d 


O 

/—*N 



d 


<D 

d 

d 

• 

O 

d 

(D 


X 

cn 


cn 

d 


a 

<d 


cj 

cn 

o 

CO 


4-J 

d 


<u 



d 

0 

jg 

4-J 

cn 

•H 



d 

cd 


o 



o 

a, 

s 

(0 

< 

4-J 

4-J 


C 

rH 


d 

o 

4-J 

Pm 

o 




cd 

d 



rH 


O 

CJ 

4-1 


rH 

X) 

#\ 

X) 

2 

<D 


rH 

o 


Pm 


•H 

0) 

<D 

d 

rH 

d 


d 


cd 

XJ 

cn 


XJ 

i—1 

> 

> 

cd 

cd 

cd 

d 

d 

cd 

d 


0) 

cd 

d 

cd 

d 

a> 


o 


0) 

d 

PH 

o 

4m 

o 

cn 

cd 

a) 

0) 

Q 

Pm 

•H 

d 

-d 

o 


•H 

O 

d 

o 


CO 

cn 


rH 

X) 

o cn 

4-J 


4-» 

4-J 


o 

cn 

CD 


0) 

X) 

Cn 

0) 

•H 0) 

O 

/—s 

d 

cd 

cn 

Pm 

d 

o 

-d 

Ptf 

d 

Cu 

s 

4-J -H 


1 

CD 

00 

d 


d 

d 

d 


cd 

d 


Cd 4-J 

14-4 

'w' 

0 

•H 

o 

a 

PH 

0) 

cd 

xj 


CO 

* 

d *H 

o 


a) 

rH 

•H 

*H 


oo 


d 



00 

H > 


X) 

d 

JO 

rH 

00 

rH 

•H 

4-» 

cd 

a 

pH 

d 

cn h 

4-J 

<D 

•H 

o 

rH 

<D 

cd 

rH 

M—l 


d 

cd 

•H 

•H 4-J 

d 

X) 

4-J 


•H 

P 

d 

rH 

•H 

X> 

cd 

d 

d 

d CJ 

O 

d 

CD 

rH 

0 

cd 

a) 

(U 

pH 

d 

a 

4-J 

•H 

♦H <3 

cn 

d 

P3 

cd 


d 

d 

P 

d 

cd 

cn 

d 

cd 

0 

cn 

*4-4 


4-J 


p 

a) 

d 

•H 

d 

cd 

CD 

d 

X) 

d 

d 


O 


CO 

o 

M 

c 

o 

ptf 

<J 

H 

< 

CO 

d> 


H 


• 

rH 

CM 

CO 

<r 

uo 

vO 

r^- 

00 

Oh 

o 

rH 













pH 

«H 






o 

p 


XJ 

X) 

cd 

p 

o 

d 

cd 

0 


•H 

cd 

p 

CD 

X) 

XJ 

0) 

xJ 

d 

d 

o 

pcj 

cd 


* *4-11 pM 



4-J 



O 



d 

1 

CD 


Oh 




cd 

d 

00 

• • 

MD 

d 

4-1 

d 

CD 

XJ 

X) 

Oh 

o 

c 


d 

CO 

d 

d 

rH 

•H 



40 


pq 

o 


cn 

H 


(D 

XJ 


4-4 

rh 

cn 

e 


Pm 

a) 

CD 

4-4 

LO 

a) 

CD 

-—' 

0 

cn 

•H 

tH 

CO 

E 



d 

d 

i—1 



H 


P 

<1 

CD 

CJ 

Pm hi 

H 


CD 


4M 


d 

d 

cd 

oj: 

CD 

CD 

• 

cd 

•H 

PX 

XJ 

4-J 

n 

£ 

d 

O 

CD 

d 

cd 



d 


e 

pq 

d 

Oh 


cd 





CD 

vO 

d 

*“) 

cd 

c 


X) 

CO 

Oh 

cd 



c 


d 


pH 

i—i 


<D 



cd 

(D 


O 

4-J 

d 

CD 


rC 

X> 


CD 

O 

CD 

0 

4-J 

d 

CD 

«J 

4-4 

P 


cd 


cd 

cn 

X) 

0) 

HI 


d 

CD 


d 

d 

rO 

*r~ 


0£ 

d 

0 

(D 

pq 




O 

O 

cd 

4-4 


XJ 



d 

4-1 

d 

CD 

CD 

d 

O 


PH 

CD 

OC 

Q 

cn 

•H 

a 



40 

o 


d 

cd 

rO 

CD 


d 

4-1 

CD 

►J 

d 


cn 

cd 

PH 

O 

4-4 


CO 

d 

d 



CD 

• 



OJ 

cd 

CD 

Po 

Q 

pp; 

(D 

4-4 

g 

cn 

d 



P 


<D 

cd 

d 

cd 

O 

d 

cd 

Pd 

53 

a) 

4-J 



d 



o 

4-4 

CD 

Oh 

> 

(D 

1—1 

£ 

CD 

d 

i—1 

1—1 

CO 

T'- 


Q 

CJ 


CD 



Oh 

• 


CD 

XJ 

a 

CD 

r—1 

CO 

CO 

CO 

d 


X 




r>. 


cd 

CD 

4-J 


d 

4-J 

1 

4-4 


cn 



cd 

d 

Oh 

o 

0 

d 

r a 


CD 

CD 

vO 


cd 

CD 

c 


!H 

JO 

Oh 

4-> 

d 

4-4 

cd 


o 

pH 

d 

00 

<D 



i—I 

ptf 


CD 

o 

Q 

CD 

cd 


d 

0 

d 


(D 

a 

(D 

cd 

CD 

PH 

4-4 

4J 


cn 

cn 

CD 

4-J 


O 

H 


•H 

d 

>* 

cd 

CD 


•r 


Pm 

CD 


4-J 

cn 





4-1 

rH 

CO 

d 

d 



<D 

<D 

cd 


CD 

cd 

C 


4d 

Q 

U 

• r\ 

4-4 

4-J 

CJ 

p 


cn 

<t 

CD 

(D 




4-4 

•H 

\—1 

Q 

d 

cn 

d 

O 

Pm 

04 


o 

CD 

o 





(D 

CJ 


>h 

<D 

• 

t"- 

CO 

T 


cn 

d 

JG 

a 

1 


P 


d 

cd 

4-J 


O 

4-4 

d 


o 

4-J 


#s 

P-. 

O 

CD 

•H 

<D 

d 

N Oh 


CO 

P 

d 

o 

00 

i — 1 

4-» 



d 

O 


vO 


d 

r a 

■H 

CD 

CD 

Oh 

d 

CD 

a> 

d 

CO 

CD 

i — 1 

cd 

0 

E 


PX 


4-J 


0) 

CD 

d 


O 

4-4 

4-J 


pH 

P 

< 


d 

o 

*H 

CN 


cd 



PX 


g 

CN 

iH 

4-J 

<D 

PX 

4-J 

g 


cd 

CO 

H 


< 

d 

O 

Pm 

o 


cd 


CD 

CJ 

d 

cn 

• es 

c 


CD 

0 


cd 

•H 

r- 

CD 

cn 

(D 

cn 

d 

Pm 

LT) 

CO 

d 

4-J 

CD 

d 


i—1 



(D 

cd 

CJ 

cd 

<d 


(D 

4-1 

4-J 


*—> 

jd 

a 

JC 


0) 

CO 

> 


Eh 

pn 

p 

1 

Q 


Oh 

LO 


Pu 


r\ 


o 


r*- 

Oh 


o 

CN 


co 

W 

cj 

u 

o 

co 


497 















ACDA/E-156 


CO 

w 

►J 

PQ 

< 

H 


g 


p 

o 

X3 

P 

3 


VO 

hO 

Oh 


E 


G 

in 

S'? 





O 

vD 

O 

CM 

00 

00 


•H 

Oh 

• 

• 

• 

• 

• 

P 

rH 

O 

Oh 

<r 

r^. 

CM 

3 


o 

CM 

CM 

CM 

rH 

X> 

r* 

rH 





•H 

P-4 






P 







P 







cn 







*H 







Q 

<r 

5"? 






vD 

O 

oo 

Oh 

vO 

Oh 

G 

Oh 

• 

• 

• 

• 

• 

00 

i—i 

o 


CM 

Oh 

CO 

G 


o 

CM 

CM 

CM 

rH 

P 

>4 

I—1 





G 

Ua 






G 







a 







p 







0) 







ph 

CO 

S'? 






vO 

O 

m 

'Cf 


C- 

i 

Oh 

• 

• 

• 

• 

• 

i 

»—1 

o 

m 

CM 

rH 

CO 



o 

CM 

CM 

CO 

rH 

0) 

rH 

1—1 





i—i 

Ua 







E 


o 

o 

Oh 

00 

uo 

Oh 

Oh 

vO 

CM 

• 

• 

• 

• 

• 

• 

• 

• 

• 

o 

vO 

CM 

CO 

o 

CO 

O 

rH 

O 

o 

rH 

CM 

CM 

CO 

rH 






CM 


O 

CM 


Oh 


CM 


<r 

CM 


LO 

CM 


rH 

CO 


CM 

O 


CM 

O 


CNI 

o 


to 

JO 

CM 

vO 

S'? 

o 

Oh 

X> 

CM 

m 

00 

Oh 

X) 

m 


Oh 

• 

• 

• 

• 

• 

• 

• 

• 

• 


i — 1 

o 

m 

CM 

CM 

CM 

rH 

o 

CO 

o 

■U 


o 

CM 

CM 

CO 

iH 






C 







00 

✓‘"'S 





/'■N 






G 

0 




»H 

S'S 




X) 


•H 

G 




G 

'-Z 




G 


X> 

P 




G 





G 


G 

00 


rH 


O 







rH 

O 


G 

/—N 

♦H 

p 




P 


o 

P 

0 

•H 

0 

P 





C0 


G 

PH 

G 

O 

G 

cd 

P 


G 


G 


•H 


P 

G 

P 

00 

o 


O 


H 



G 

00 

PH 

00 

*H 

rC 


G 





O 

o 

CO 

o 

rH 

p 


G 




00 

G 

P 


p 

X> 

G 


G 


P 

G 

c 

G 

P-i 

• rv 

PH 

o 

< 


G 


G 

O 

•H 

P 


G 





4-» 


G 

•H 

CO 

CO 

G 

CO 

>> 

rH 

rH 

rH 

G 


0 

4-1 

G 

•H 

O 

G 

o 

G 

G 

g 

*H 


a 

U 

O 

CO 

G 

G 

G 

P 

G 

G 

G 


o 

G 

£ 

to 

G 

«4H 

G 

O 

o 

G 

£ 


rH 

P 

* 

<J 

P 

G 

P 

H 

•H 

O 



G 

4-» 



CO 

Q 

P 


P 

cn 

"O 


> G 

CO 

rH 

co 

•H 


G 


G 

p 

G 


G O 

G 

•H 

p 

CO 

i—1 

CJ 


00 

G 

G 

4-1 

a *h 

o 

0 

G 

co 

•H 



*H 

PH 


G 

P 

CJ 

G 

G 

< 

> 

G 


rH 


G 

G 

r Cd 


Pm 



•H 

00 


X) 

>N 

O 

0 

X3 G 

Po 


o 

>N 

O 

•H 


O 

P 

*H 

G 

CJ rH 

P 

G 

G 

P 

v-z 

G 



G 

4J 

P 

P G 

G 

CO 

0 

G 


P 


rH 

4-1 

G 

G 

G > 

4-J 

G 

O 

P 

p 

O 


G 

*H 

P 

o 

G W 

*H 

G 

PC 

*H 

G 

P H 


P 

rH 

G 

o 

CO 

rH 

4-4 


rH 

X2 



O 


PH 

P 

G 

•H 

G 


♦H 

P 



H 

£ 

O 

PH 

PH 

£ 

Q 


£ 

O 




• 

• 

• 

• 

• 

• 


• 

• 




rH 

CM 

CO 


m 

hO 



00 



498 


Total Obligational Authority 

(millions of dollars) $50,441 $51,208 $50,979 $50,657 $65,449 






TABLE 3 (continued) 

(est.) 

__ FY 1967 FY 1968 FY 1969 FY 1970 FY 1971 

Total Obligational Authority 100.0% 100.0% 100.0% 100.0% 100.0% 


ACDA/E-156 





























4-1 


03 

CM 

fs» 

MD 

«H 

03 

o 

03 

U0 

rH 

<r 



1 

0) 

oo 

• • 

30 

03 

CO 

CO 

26. 

25. 

10. 

• 

rH 

• 

rH 

• 

o 

• 

O 

03 

*3 

CM 



Ser 

T3 
G 
PQ 

XJ 

U 

o 

rH 

*3 














4-4 










</> 



T3 

d) 

4-1 

I—1 












<U 

cn 

•H 













0 

G 

rH 

>3 












G 

<u 

CJ 

G 












< 

4-4 


G 

03 

00 

CO 

r>» 

UO 

00 

03 

rH 

uo 

CO 



0) 

d) 

Q 

• 

X 

G 

G 

CM 

CO 

CM 

30 

CM 

• 

03 

• 

rH 

• 

o 

• 

o 

• 

o 

o 

#3 



4-1 

G 

G 

03 

30 

G 

G 

3^ 









rs. 



<U 

03 

G 










<o- 



CO 

rH 

rH 

4-4 














CJ 

CU 












cu 

r O 


0£ 












-C 

C 

CU 

T3 












4-1 

G 

cn 

G 









CM 





G 

PQ 

O 

rH 

iH 

00 

UO 


03 

rH 

CO 



d) 

0 

d) 

• 

• 

• 

• 

• 

• 

• 

• 

'd' 



G 

G 

4-1 

d) 

o 

00 

03 

03 

rH 

O 

o 

o 

#3 



o 

G 

<u 

cn 

CO 

CM 

CM 






03 



4-4 

ofl 

Q 

G 









r^- 



d) 

o' 


(U 









-CO- 



-O 

M 

4-1 

4-4 













CH 

O 

cu 












G 



Q 












g 

CU 

Jg 













eg 

W 

G 

o 


CO 







30 



g 

G 

G 


rs 


UO 

rH 

00 

00 

rH 

rH 



G 

(U 

4-4 

03 

• 

• 

• 

• 

• 

• 

• 

• 

00 



53 

4-1 

CU 

1-1 

00 


O 

03 

CM 

o 

o 

o 

#3 



a 

d) 

G 


CM 

CM 

CO 






30 



X 

Q 

CJ 










c- 





d) 

G 









</> 



• 

CO 

CO 

G 












CO 
















1 

4-4 

0 












4-> 

03 

O 

G 












G 

30 


G 


30 







CM 



d) 

03 

4-4 

0£ 

in 

UO 

03 

rs. 

30 

o 

rH 

St 



JO 

iH 

C 

O 


30 






• 

O 



o 


CU 

G 


CM 

03 

iH 

O 

rH 

o 

#3 



Pd 

G 

0 

Oh 

CM 

CM 

CO 






CO 




G 

CU 










rs- 



<u 

CU 

4-1 

CU 









-CO- 



cn 

>-< 

G 

cn 












G 


4-1 

G 












a) 

tH 

CO 

CU 











• 

4-1 

G 


4-4 











cn 

CU 

U 

• #3 

CU 






00 /"v 





rH 

Q 

cn 

<t 

Q 






C B 





G 


*H 

rH 





TJ 


•H G 





4-4 

4-t 

IH 

CM 

sf 




G 


T> G 





o 

O 



r- 




CO 


G 00 


rH 



4-4 


<U 

• 

1 






rH O 

0 

G /-N 




Jo 

-G 

C4 O 




4-J 


O G 

•H B 

4-> 


o 

g 

4-4 






cn 


C D. 

G 

CJ G 

•H 


4-4 

G 


#3 

03 


<U 


a) 


•H 

G 

<U G 

G 



4-4 

G 

✓—V 

rH 


cj 


H 


3 -^ <d 

00 

a oo 

O 

/*N 

T3 

cu 

O 

00 



c 




CJ 

o 

CO o 

-C 

05 

T3 

G 


30 

G 


G 




00 c 

g 

g 

4-1 

G 

G 

CJ 

CU 

03 

G 


g 


4-> 

G 

C G 


• r a. 

G 

G 


<U 

CU 

rH 

d) 


d) 


G 

O 

•H 4-> 


<d 

<3 

rH 

4-» 

CO 

4-> 


>4 


4-4 


<U 

•H 

C0 (0 

<U 

cn ^ 


rH 

O 


4-> 

#3 


rH 

c 


0 

4-4 

G *H 

cj 

G a 

rH 

o 

G 

44 

•H 

CM 


<U 

*H 


Cu 

CJ 

O 05 

G 

<u G 

G 

T3 


O 

£ 

CM 

rH 

a 

G 


o 

G 

PC cn 

G 

4-1 d) 

G 


>3 

4-1 

§ 


G 

g 

X 


tH 

G 

<1 

4-4 

d) G 

O 

4-1 

G 

G 

o 


O 

o 



CU 

4-4 

>3 

cn 

Q G 

•H 

o 

S 

<u 

CJ 

G 

cn 

cn 



> G 

05 

rH 05 

•H 

G 

4-4 



0 


G 

•H 

g 

G 


0) O 

G 

•H G 

05 

H CJ 

G 

cn 

rH 

CU 

cn 

G 

IH 

<D 

c0 

4-4 

Q *H 

O 

S <u 

05 

•H 

00 

G 

•H 

4-4 

cu 

G 


P-. 


g 

4J 

CJ 

G G 

< 

> C 

•H 

O 

G 

G 

a 

G 

cu 


g 

0) 

•* G 


Ph £ 


•H 00 

rH 

•H 

4-4 

4-4 

•H 

■o 


>•» 

o 

0 

s: G 

>3 

o 

Jo 

CJ *H 

40 

tH 

d> 

CO 

> 

3_^ 

H 

u 

•H 

0) 

a rH 

u 

d) <u 

g 

3—QJ 

O 

rH 






G 

4-4 

M 

G G 

G 

cn 6 

G 

G 


•H 






u 

CO 

0 

G > 

4-4 

G O 

4-4 

G O 

iH 

0 

T3 

• • 





M 

a 

<U W 

•H 

<U pc 

H 

d) tH 

G 


CU 

CO 




rH 

<D 

o 

CO 

tH 

4-1 

rH 

4= 

4-4 


'O 

w 




•H 

o. 

u 

<U 

*H 

d) 

•H 

4-1 

O 


G 

cj 




X 

o 

&4 

Pd 

a 

Q 

a 

o 

H 


G 

Pd 














O 

pp 














Pd 

o 




rH 

CM 

CO 

'O- 

UO 

30 

r^. 

00 



G 

CO 





499 


p. 157; Statement of Secretary of Defense Melvin R. Laird before a Joint Session of 
the Senate Armed Services Committee and the Senate Subcommittee on Department of 
Defense Appropriations on the Fiscal Year 1971 Defense Program and Budget (February 
20, 1970), p. 159. 













ACDA/E-156 


of the organizational factors which are the focus of this essay. 

That the contribution of students of organizational and political 
factors to this enterprise should consist of a reminder and "considera- 
tions" rather than systematic analysis reflects the state of the art. 
Nevertheless the reminder about organizational and administrative fac¬ 
tors affecting shifts in defense expenditures is needed at every turn. 
This study T s inclusion of a section on organizational and administrative 
considerations is indicative of the investigators 1 openness to such 
factors. These points are most relevant as they affect the character 
of other sections of this study. But it should be possible in this 
section to do more than state a reminder and then apply it to a number 
of related areas. 

This essay will draw on earlier work by the author to lay out in a 
more general and systematic fashion a framework that highlights organi¬ 
zational and administrative factors as they affect governmental outcomes. 
This framework should be suggestive of dimensions that are typically 
omitted from economic analysis. In the following sections we shall 
apply this framework to a number of problems central to the transfer of 
resources from military to civilian uses. 


XIII.2 AN ORGANIZATIONAL PROCESS FRAMEWORK 

For some purposes, the behavior of the U.S. government can be use¬ 
fully summarized as action chosen by a unitary, rational decisionmaker: 
centrally controlled, completely informed, and value maximizing. 'But 
this simplification must not be allowed to conceal the fact that the 
Federal government consists of a conglomerate of semi-feudal, loosely 
allied organizations, each with a substantial life of its own. 
Administration leaders do sit formally, and to some extent in fact, on 
top of this conglomerate. But the Federal government perceives prob¬ 
lems through organizational sensors, defining alternatives and estimat¬ 
ing consequences as organizations process information. The behavior of 
the U.S. government can therefore be understood less as deliberate 
choices and more as outputs of large organizations. 

These bald statements should not be surprising for they charac¬ 
terize the behavior of all modern governments. To be responsive to a 
broad spectrum of problems, governments consist of groups of large 
organizations, each with primary responsibility for a particular area. 
Each organization attends to a special set of problems and acts in 
quasi-independence on these problems. Yet few important issues fall 
exclusively within the domain of a single organization. Thus govern¬ 
ment behavior toward any important problem reflects the independent 
output of several organizations, sometimes partially coordinated by 


V t 


500 




ACDA/E-156 


government leaders who can substantially disturb, but not substantially 
control, the behavior of these organizations. 

Each organization must attend to its set of problems, process 
masses of information, and perform (and be prepared to perform) a 
range of actions. To accomplish these jobs, the behavior of large num¬ 
bers of individuals must be coordinated. Coordination requires stan¬ 
dard operating procedures—rules according to which things are done. 

When hundreds of people are involved, a capability for reliable perfor¬ 
mance requires established "programs.” Indeed, if the eleven members 
oz a football team are to perform adequately on any particular play, 
each man must not "do what he thinks needs to be done" or "do what the 
quarterback tells him to do." Rather, each player must perform the 
maneuvers specified by a previously established play, which the quarter¬ 
back has simply called in this situation. 

At any given time, a government consists of existing organizations, 
each with a fixed set of standard operating procedures and programs. 

The behavior of these organizations—and consequently of the government 
—concerning an issue at any particular time is therefore determined 
primarily by routines established in these organizations prior to that 
time. Explanation of a government action starts from this base line, 
noting incremental deviations. Evaluation of alternatives that require 
governmental action must be sensitive to this process. 

Usually, change in organizational routines occurs gradually; 
occasionally, however, sharp deviations from the base line do happen. 
Dramatic organizational change occurs in response to major disasters. 

But still the incremental as well as the more dramatic changes are 
influenced by existing organizational capabilities and procedures. 

Borrowed from studies of organizations, these loosely formulated 
propositions amount simply to tendencies . Each must be hedged by modi¬ 
fiers like "other things being equal" and "under certain conditions." 

In particular instances, tendencies hold—more or less. In specific 
situations, the relevant question is: more or less? But this is as 
it should be. For, on the one hand, "organizations" are no more homo¬ 
geneous a class than "solids." When scientists try to generalize about 
"solids," they achieve similar results. Solids tend to expand when 
heated, but some do and some don’t. More adequate categorization of 
the various elements now lumped under the rubric "organizations" is 
thus required. On the other hand, the behavior of particular organiza¬ 
tions seems considerably more complex than the behavior of solids. 
Additional information about a particular organization is required for 
further specification of the tendency statements. In spite of these 
two caveats, the characterization of government action as organiza¬ 
tion aT'outpTut differs distinctly from the assumption of rational, 


501 




ACDA/E-156 


value-maximizing choice and implementation made by many systems 
analysts. Attempts to understand problems of governmental choice in 
terms of this frame of reference should prove fruitful. 

The influence of studies of organizations upon the existing liter¬ 
ature and practice of economic analysis is difficult to discern. Eco¬ 
nomic analysts are rarely students of organization theory. Organization 
theory has.only recently come to study organizations as decisionmakers 
and implementers and has as yet produced few behavioral studies of gov¬ 
ernmental organizations from the decisionmaking perspective. It seems 
unlikely, however, that these gaps will remain unfilled, for considera¬ 
ble progress has been made in the study of the business firm as a deci¬ 
sionmaking organization. Scholars have begun applying these insights 
to contexts in which the decisionmaker is a government organization 
rather than a firm. Moreover, interest in an organizational perspective 
is spreading rapidly among institutions and individuals concerned with 
actual government operations. 

The next section summarizes the literature of organization theory 
and economics on the basis of which an organizational process framework 
is constructed. Then this framework is presented and applied to a num¬ 
ber of proposals about non-military uses of the military. 


XIII.2.1 Organizational Theory and Economics 

One venerable tradition in the social sciences permits the expres¬ 
sion cf personal discoveries in an individually tailored vocabulary. 
Unfortunately, this encourages much repackaging of existing theories 
and not a little confusion. With an eye on this pitfall, this essay 
makes maximum use of terms and concepts developed by organization the¬ 
orists and economists. This approach both acknowledges the author*s 
intellectual debt and makes explicit the relation between this organi¬ 
zational process framework and models of other types of organizations. 

Organization theory can make a reasonable claim to be one of the 
youngest sciences. James March dates the origin of contemporary, cumu¬ 
lative studies of organizations quite recently: "The field as a more 
or less identifiable .luster of research interests within a number of 
social sciences dates for most purposes from a group of books written 
between 1937 and 1947—Barnard, Roethlisberger and Dickson, and 

Simon." 3 Thus Chester Barnard's The Functions of the Executive and 
Herbert Simon's Administrative Behavior mark the beginning and the end 


James G. March, Handbook of Organizations (Chicago: Rand- 
McNally, 1965), p . xiii. 


/ 


502 






ACDA/E-156 


of the decade of definition of organization theory as a semi-discipline. 
The second decade witnessed an enormous increase in the amount of effort 
devoted to the systematic study of organizations. Many of the "discov- 
eries of that decade (and of earlier work) are codified in a logically 
ordered, propositional form by March and Simon in their path-breaking 
b°°k, Organizations , published in 1958. March and Simon posed the 
three central problems with the ’’state of the art" as it stood at the 
end of the second decade:^ 

1) "The literature leaves one with the impression that after all, 
not a great deal has been said about organizations"; 

2) "but it has been said over and over in a variety of languages. 
Consequently, we require a serious effort towards the con¬ 
struction of a common language "; and 

3) "There is in the literature a great disparity between hypothe- 
ses and evidence." 


The third decade of organization theory's short life—which observ¬ 
ed another exponential leap in resources devoted to the examination of 
organizational behavior—was capped by the publication of the monumental 
Handbook of Organizations in 1965.^ As its Introduction states modest¬ 
ly, the Handbook "summarizes and reports the present state of knowledge 
about organization.Contributions to the volume come from four poli¬ 
tical scientists, five economists, five psychologists, six students of 
business and industrial organizations, and ten sociologists, yet the 
editor found it unnecessary either to provide a glossary or to refer¬ 
ence the contributors' disciplinary identification. Thus some progress 
has been made in coming to grips with the problem of a common vocabu¬ 
lary. The Handbook's 1247 double-columned pages suggest that consider¬ 
ably "more" has now been said about organizations. The sophistication 
displayed by some of the articles indicates that even the third problem 
may not prove entirely intractable, for the study of organizations has 
achieved extraordinary momentum as the result of inputs from so many 
disciplines. As James March,- the editor of the Handbook , states in the 
Introduction: 


4 

1958). 

5 

6 ' 

1965). 

7 


James G. March and Herbert A. Simon, Organizations (New York: Wiley, 
Ibid., p. 5. Emphasis added. 

James March, Handbook of Organizations (Chicago: Rand McNally, 

Ibid. , p. ix. 


503 
















ACDA/E-156 


The vitality represented by the contributors to the Handbook , 
and by contemporary organizations, suggests that it is going 
somewhere. There is a commitment by first-class scholars. There 
is a set of interesting theoretical ideas. There is an involve¬ 
ment in empirical research. There is a large, mostly untouched, 
and usually cooperative group of organizations to study. There 
is widespread recognition of the significance of organizational 
behavior both as a factor in the analysis of complex socia^ sys¬ 
tems and as an important special case of human activities. 

The spectrum of interest in the study of organizational behavior 
can best be indicated by citing the Handbook 1 s chapter headings under 
".Theoretical-Substantive Areas:" management theories; economic theories 
of organization; organizational growth and development; communications 
in organizational decisionmaking; organizational control structures; 
the comparative analysis of organizations. Obviously an attempt to 
summarize this literature is beyond the scope of this essay. Indeed, 
the Handbook itself is the summary to which the interested reader is 
referred. It should be useful, nevertheless, to indicate the area of 
organization theory upon which our organizational process model of 
government behavior is most dependent. 

The branch of organization theory which takes as its focus the 
decisionmaking process in organizations affords the richest source of 
insights for the framework developed here. For two decades, the seminal 
figure in this branch of organization theory has been Herbert Simon. 

His work is motivated by the attempt to understand the basic features 
of organizational structure and function as they derive from the char¬ 
acteristics of human problem-solving and rational human choice. 

Most theories of individual and organizational choice employ a 
concept of "comprehensive rationality," according to which individuals 


8 


Ibid., p. xiv. 

9 

Ibid ., p. vi. 

^As Simon states clearly in the Preface to his fascinating collec¬ 
tion of essays, Models of Man (New York: Wiley, 1957), "In assembling 
these 16 essays in a single volume together with some analysis of mutu¬ 
al relations, I make confessions that the compliments (for the broad 
range of his interests) were largely undeserved, that what appeared to 
be scatteration was really close to monomania." (p. vii.) "The princi¬ 
ple of bounded rationality lies at the very core of organization theory, 
as well as of any 'theory of action' that purports to treat of human 
behavior in complex situations." (p. 200.) 


504 









ACDA/E-156 


and organizations attempt to choose the best alternative, taking account 
of both consequences and their probabilities. But such a choice proce¬ 
dure requires: 

1) the generation of all possible alternatives, 

2) assessment of the probabilities of all consequences of each, 
and 

3) evaluation of each set of consequences for all relevant goals. 

These requirements are, in Simon 1 s words, "powers of prescience 
and capacities for computation resembling those we usually attribute to 
God." 11 By focusing on the limits of human capacity in comparison with 
the complexities of the problems which individuals in organizations must 
face, Simon develops the concept of "bounded rationality." The physical 
and psychological limits of man’s capacity as alternative generator, in¬ 
formation processer, and problem-solver constrain the decisionmaking 
processes of individuals and organizations. Because of these bindings, 
intendedly rational action requires simplified models that extract the 
main features of a problem without capturing all of its complexity. 

Simon’s work finds five characteristic deviations from comphrehen- 
sive rationality that are displayed by the simplifications of human 
problem-solvers: 

1) Factored Problems . Problems are so complex that only a 
limited number of aspects of each problem can be attended 
to at a time. Thus individuals factor problems into quasi¬ 
independent parts and deal with the parts one by one. 
Organizations factor complex problems into a number of 
roughly independent parts which are parceled out to various 
organizational units. Ideally problems are factored by a 
means-end analysis, which assigns separable pieces of a 
problem to organizational subunits as subgoals. The 
structure of an organization thus reflects the problems 
which its subunits factor. Roles consist in the specifi¬ 
cation of some subset of the premises that are to guide 
actions in a specific subunit.^ 

2) Satisficing . The goal of maximization or optimization 
is replaced with a goal of satisficing . Human beings 
choose not by considering all alternatives and picking 
the best consequences of action but rather by finding a 


11 Ibid., p. 3. 

^This point is taken from Chester E. Barnard, The Functions of the 
Executive, (Cambridge: Harvard University Press, 1938). 


505 










ACDA/E-156 


course of action that is "good enough"—that satisfies. 
Organizations are happy to find a needle in the haystack 
rather than searching for the sharpest needle in the 
haystack.^ 

3) Search . In comprehensive rationality all alternatives 
are considered, and thus the problem of search is trivial. 

Where satisficing is the rule—stop with the first alter¬ 
native that is good enough—the manner in which alternatives 
are turned up is critical. Organizations generate alter¬ 
natives by relatively stable, sequential search processes. 

As a result, the menu is severely limited.^ 

4) Uncertainty Avoidance . Comprehensively rational agents 
deal with alternate consequences of action by fixing a 
probability distribution of possible outcomes. People 
in organizations are quite reluctant to base actions on 
estimates of an uncertain future. Thus choice procedures 
which emphasize short-run feedback are developed. Organi¬ 
zations, like house thermostats, rely on relatively prompt 
corrective action to eliminate deviations between actual 
and desired temperatures, rather than accurate prediction 
of next month’s temperature.^ 

5) Repertoires . Repertoires of action programs are developed 
by organizations and individuals, and these serve as the * 
alternatives of effective choice in recurring situations. 

The theory of the firm in economics has traveled an analogous path. 
This is hardly accidental, since the firm is a member of the class of 
organizations with reference to which the theory of organizations has 
developed. More to the point, Simon and his colleagues of the Carnegie 
School have applied his organizational approach specifically to the 
theory of the firm. 


A Behavioral Theory of the Firm , by Richard Cyert and James March, 
was published in 1963. ±/ Proceeding from a careful catalogue of chal¬ 
lenges to the classical theory of the firm and a complete survey of the 


Simon, Models, pp. 204ff. 

14 

Simon, Models, pp. 248ff. 

15 

Simon, Models , pp. 168ff. 

16 

Herbert A. Simon, Administrative Behavior (New York: MacMillan, 
1947), pp. 167ff. 

^Richard M. Cyert, James G. March, A Behavioral Theory of the 
Firm (Englewood Cliffs: Prentice-Hall, 1963). 


506 


\ 














ACDA/E-156 


literature of organization theory, Cyert and March make a new departure. 
In contrast to traditional theories which explain the firm's behavior in 
terms of market factors, Cyert and March focus—as organization theory 
would suggest on the effect of organizational structure and conven¬ 
tional practice on the development of goals, the formulation of expecta¬ 
tions, and the execution of choice. 18 

This product of the Carnegie School represents an extension of 
Simon s concern with problem solving under conditions of bounded ration- 
alit y- Cyert and March attempt to understand organizational decision 
as the execution of choice made in terms of goals, on the basis of 
expectations. Thus the framework of the analysis is fixed by three 
categories: 

1) organizational goals, 

2) organizational expectations, and 

3) organizational choice. 

Following Barnard, Cyert and March view the organization as a coalition 
of participants (some of whom are not necessarily on its payroll, e.g., 
suppliers and customers) with disparate demands, changing focuses of 
attention, and limited ability to attend to all problems simultaneously. 
Bargaining among potential coalition members produces a series of de 
f■acto agreements which impose constraints on the organization. The 
list of these more or less independent constraints, imperfectly ration- 
alized^n terms of more general purposes, constitutes an organization’s 
goals. Organizational expectations arise from inferences drawn from 
available information. Organizational choice emerges as the selection 
of the first alternative which organizational expectations identify as 
acceptable in terms of organizational goals. 

At the core of this theory are concepts which relate variables 
affecting the three major categories (goals, expectations, and choice). 

1) Quasi-resolution of conflict . There is no internal consensus 
within a firm at the level of operational goals. Nevertheless 
organizations thrive with considerable latent goal conflict. 

The prevailing coalition imposes on the organization a series 
of independent aspiration level constraints. In their price 
and output model of the business firm, Cyert and March postu¬ 
late a profit goal, a sales goal, a market share goal, an in¬ 
ventory goal, and a production goal. Individual subunits of 


18 

19 


Ibid . 

Ibid. 


P- 


1 . 


pp. 26ff. 


507 







ACDA/E-156 


the organization handle pieces of the firm’s factored 
problem in relative independence. The sales department 
is responsible for sales goals and strategy, the produc¬ 
tion department for production. Inconsistency which occurs 
as a result of this "local rationality” is absorbed by 
"organizational slack." Conflicts among goals are re¬ 
solved by sequential attention to goals. Conflicting 
pressures to "smooth production" and to "satisfy customers" 
are typically resolved by first doing one and then the 
other. 20 


2) Uncertainty avoidance . Uncertainty is a critical factor of 

the environment in which the organization lives. Organizations 
seek to avoid uncertainty. The first rule is: solve press¬ 
ing problems rather than developing long-run strategies. The 
requirement that they correctly anticipate events in the dis¬ 
tant future is avoided by using decision rules emphasizing 
short-run feedback rather than anticipation of long-run 
uncertain events. The second rule is: negotiate with the 
environment. The requirement that future reactions of other 
parts of the environment be anticipated is avoided by impos¬ 
ing plans, standard operating procedures, industry traditions, 
and uncertainty-absorbing contracts. 2 ^ 


3) Problemistic search . Since Cyeit and March argue that 
organizations use acceptable level goals and select the 
first alternative they meet which satisfies these goals, 
the theory of organizational search is critical. Organi¬ 
zational search is problemistic search. Search is stimu¬ 
lated by a specific problem and motivated to find a solu¬ 
tion to that problem. Search follows simple-minded rules 
which direct search first to the neighborhood of problem 
symptoms, then to the neighborhood of the current alter¬ 
native. Search is biased by the special training and ex¬ 
perience of the various parts of the organization, the 
interaction of hopes and expectations, and the communication 
distortions reflecting unresolved conflict. 22 


4) Organizational learning . This behavior characterized by 
the three concepts is relatively stable. Organizations, 
however, are dynamic institutions. They change adaptively 
as the result of experience. Over time, organizational 


20 

Ibid . , pp . H7ff. 
21 Ibid . , pp. 118-120. 
22 Ibid., pp. 120-122. 


508 









ACDA/E-156 

_ 


learning produces changes in goals, attention rules, 
and search rules. 

, process-oriented model of the firm has been applied to actual 

business behavior with some measure of success. The four relational 
concepts end themselves to the language of computer programming. 

Though Cyert and March produce a rather successful simulation model of 
a 4Ulte unexciting example (one department of a large retail department 
fu° r !i .» Geoffre y Clarkson’s application of a similar model to simulate 

6C 8 * on P roce ss of an individual trust officer in selecting a port¬ 
folio of trust account investments, is more interesting. 25 Yair Aharoni 
emp oys a modified version of this theory with considerable success to 
t e foreign Investment decision process of organizations (though he 
in s the process too complicated for any simple computer simulation).^ 

Moreover, interesting points of tangency with the behavioral theory 
of the firm can be found in a number of studies of governmental organi¬ 
zations. Patrick Crecine applies the basic model to simulate th€? be¬ 
havior of government units in municipal budgeting. Wildavsky’s work on 
national budgeting exhibits a quite similar model. Eckstein’s British 
National Health Service , Sayer and Kaufman’s Governing New York City , 
and Thompson 9 8 The Regulatory Process in QPA Rationing reflect an 
analogous orientation. 

Z3 Ibid~ t pp. 123-125. 

^ Ibld . , Chapter 7. 

25 - 

Richard Cyert and James March, Chapter 10. See also G.P.E. 
Clarkson, Pdrtfolio Selection: A Simulation of Trust Investments 
(Englewood Cliffs, New Jersey: Prentice-Hall, 1962). 

26 

Yair Aharoni, The Foreign Investment Decision Process (Boston: 
Harvard University, Graduate School of Business Administration, Division 
of Research, 1966). 

27 

John P. Crecine, Governmental Problem Solving: A Computer Simu¬ 
lation of Municipal Budgeting (New York: Rand McNally, 1969) ; Harry 
Eckstein, The English Health Service (Cambridge: Harvard University 
Press, 1958); Wallace Sayre and Herbert Kaufman, Governing New York City 
(New York: Russell Sage Foundation, 1960). Victor A. Thompson, The 
Regulatory Process in QPA Rationing (New York: Kings Crown Press, 1950); 
and Aaron Wildavsky, The Politics of the Budgetary Process (Boston: 
Little Brown, 1964). 


509 



















ACDA/E-156 


XIII.2.2 Organizational Process Framework 

This capsule account of organizational theory and economics pro¬ 
vides a context within which to outline an organization process frame¬ 
work relevant to governmental outcomes. This framework should be sug¬ 
gestive of perspectives that will be important in the future. Without 
the necessary, but missing, behavioral studies of the organizations that 
constitute governments, the present formulation must be more an expres¬ 
sion of the prospects than of the payoffs in this area of inquiry. In 
order for the framework to be applied to a specific case, the bare bones 
of this generalized statement must be fleshed out by appropriate studies 
of the characteristics of each organization involved. Nevertheless, the 
present state of knowledge of the behavior of organizations does suggest 
a number of interesting implications relevant to the limits of assump¬ 
tions of automatic, rational choice and implementation. 

In order to sharpen the formulation of the framework, it will be 
articulated as an "analytic paradigm" in the technical sense of this 
term developed by Robert K. Merton^ for sociological analyses. Accord¬ 
ing to Merton, a paradigm is a systematic statement of the basic assump¬ 
tions, concepts and propositions employed by a school of analysis. The 
components of the paradigm formulated in this essay include the basic 
unit of analysis, the focal concepts, the dominant inference pattern, 
and, simply for illustrative purposes, several of the propositions sug¬ 
gested by the paradigm. Considerably weaker than any satisfactory the¬ 
oretical model, these paradigms nevertheless represent a short step in 
that direction from looser, implicit conceptual models. 


XIII.2.2.1 Basic Unit of Analysis: Governmental Action as Organiza¬ 

tional Output 

Governmental action is, in three critical senses, the output of 
organizational processes. First, the actual occurrences are organiza¬ 
tional outputs. For example, U.S. entry into the Vietnam War, that is, 
the fact that American soldiers were firing at Viet Cong soldiers in 
South Vietnam in 1965, is an organizational action: the action of men 
who are soldiers in platoons which are in companies, which in turn 
comprise armies, responding as privates to lieutenants who are respon¬ 
sible to captains and so on to the commander, moving into Vietnam, ad¬ 
vancing against enemy troops, and firing according to fixed routines of 
the American army. Government leaders can trim the edges of this out¬ 
put and exercise some choice in combining outputs. But the mass of 
behavior is determined by previously established procedures. 


Robert K. Merton, Social Theory and Social Structure (Glencoe; 
Illinois: Free Press, 1949), pp. 12-16. 


510 







ACDA/E-156 


Second, existing organizational routines for employing present 
physical capabilities constitute the range of effective choice open to 
government leaders confronted with any problem. Only the existence of 
men, equipped and trained as armies and capable of being transported to 
Vietnam, made entry into the Vietnam War a live option for the U.S. 
leaders. The fact that the fixed programs (equipment, men, and routines 
which exist at the particular time) exhaust the range of buttons that 
leaders can push is not always perceived by these leaders. But in every 
case it is critical for an understanding of what is actually done. 

Third, organizational outputs structure the situation within whose 
narrow constraints leaders must contribute their "decisions” concerning 
an issue. Outputs raise the problem, provide the information, and make 
the initial moves that color the face of the issue which is presented to 
the leaders. If one understands the structure of the situation and the 
face of the issue 4 --which are determined by the organizational outputs— 
the formal choice of the leaders is frequently anti-climactic. 

Analysis of formal governmental choice should focus on the infor¬ 
mation provided and options defined by organizations, the existing or¬ 
ganizational capabilities which exhaust the effective choices open to 
the leaders, and the outputs of relevant organizations that fix the lo¬ 
cation of pieces on the chess board and shade the appearance of the 
issue. Analysis of actual government behavior should focus on execu¬ 
tionary outputs of individual organizations as well as on organizational 
capabilities and organizational positioning of the pieces on the chess 
board. 


XIII.2.2.2 Organizing Concepts 

XIII.2.2.2.a Organizational Actors . The governmental actor is not a 
monolithic "nation" or "government" but rather a constellation of 
loosely allied organizations on top of which government leaders sit. 
This constellation acts only as component organizations perform rou¬ 
tines. In the U.S. Government, the departments or agencies are typi- 
cally the principal agents. 7 


^Organizations are not monolithic. The proper level of disaggre¬ 
gation depends upon the objectives of the analysis. This paradigm is 
formulated with reference to the major organizations which constitute 
the U.S. Government. Reformulation for the principal organizational 
components of each of the departments and agencies, for example, dis¬ 
aggregating the Navy into the "brown shoe Navy" (aircraft carriers), 
"black shoe Navy" (traditional surface ships), the submariners, and the 
nuclear propulsion club (Polaris) would be relatively straightforward. 

511 


i 







ACDA/E-156 


XIII.2.2.2,b Factored Problems and Fractionated Power . Surveillance of 
the multiple facets of foreign and military affairs requires that prob¬ 
lems be cut up and parcelled out to various organizations. Within the 
UVS. Government, the Department of State has primary responsibility for 
diplomacy, the Department of Defense for military and security matters, 
the Treasury for economic affairs, and the CIA for intelligence. 

To avoid paralysis, primary power must accompany primary responsi¬ 
bility. The Defense Department purchases weapons required for national 
security; the CIA gathers relevant intelligence. If organizations are 
permitted to do anything, a large part of what they do will be deter¬ 
mined within the organization. Thus each organization perceives prob¬ 
lems, processes information, and performs a range of actions in quasi¬ 
independence (within broad guidelines of national policy). 

The overriding fact about large organizations is that their size 
prevents any single central authority from making all important deci¬ 
sions or directing all important activities. Factored problems and 
fractionated power are two edges of the same sword. Factoring permits 
more specialized attention to particular facets of problems than would 
be possible if government leaders tried to cope with these problems by 
themselves. But this additional attention must be paid for in the coin 
of discretion for what an organization attends to, and how organization¬ 
al responses are programmed. 

XIII.2.2.2.c Parochial Priorities and Perceptions . Primary responsi¬ 
bility for a narrow set of problems encourages organizational parochi¬ 
alism. These tendencies are enhanced by a number of additional factors: 

1) selective information available to the organization, 

2) recruitment of personnel into the organization, 

3) tenure of individuals in the organization, 

4) small group pressures within the organization, and 

5) distribution of rewards by the organization. 

Clients (e.g., interest groups), government allies (e.g.. Congressional 
committees), and extra-national counterparts (e.g., the British Minis¬ 
try of Defense for the Department of Defense [international Security 
Affairs]] or the British Foreign Office for the Department of State 
CEuropeanH) galvanize this parochialism. Thus organizations develop 
relatively stable propensities concerning operational priorities, per¬ 
ceptions, and issues. For example, the military services are manned by 
careerists on a highly structured ladder. Promotion to higher rungs is 
dependent on years of demonstrated, distinguished service to that 


312 






ACDA/E-156 


Service’s mission. Work routines, patterns of association, and infor¬ 
mation channels combine with external pressures from organized groups 
and friends in Congress to make quite predictable a Service’s continual 
search for new hardware consistent with currently assigned roles and 
missions, for instance, the Air Force’s pursuit of a new manned bomber. 


XIII.2.2.2.d Action as Organizational Output . The preeminent feature 

of organizational activity is its programmed character: the extent to 
which behavior in any particular case is an enactment of preestablished 
routines. In producing outputs, the activity of each organization is 
characterized by: 

1) Goals: Constraints Defining Acceptable Performance—The opera¬ 
tional goals of an organization are seldom revealed by formal mandates. 
Rather, each organization’s operational goals emerge as a set of con¬ 
straints defining acceptable performance. Central among these con¬ 
straints is organizational health, defined usually in terms of bodies 
assigned and dollars appropriated. The set of constraints emerges from 
a mix of expectations and demands of other organizations in the govern¬ 
ment, statutory authority, demands from citizens and special interest 
groups, and bargaining within the organization. These constraints 
represent a quasi-resolution of conflict—the constraints are relatively 
stable, so there is some resolution; but the constraints are not compa¬ 
tible, hence it is a quasi-resolution. Typically, the constraints are 
formulated as imperatives to avoid roughly specified discomforts and 
disasters. For example, the behavior of each of the U.S. military ser¬ 
vices (Army, Navy, and Air Force) seems to be characterized by effective 
imperatives to avoid: 

a) A decrease in dollars budgeted; 

b) A decrease in manpower; 

c) A decrease in the number of key specialists (for example, for 
the Air Force, pilots); 

d) Reduction in the percentage of the military budget allocated 
to that Service; 

e) Encroachment of other Services on that Service’s roles and 
missions; and 

f) Inferiority in any class of weapon. 

The fourth constraint is at the heart of what many civilians in the 
Office of the Secretary of Defense found puzzling in the Air Force’s 
outburst at the first Kennedy budget—which increased total Air Force 
dollars by approximately four percent. That budget also reduced the 


513 



ACDA/E-156 


Air Force*s percentage of the defense pie. 

2) Sequential Attention to Goals—The existence of conflict among 
operational constraints is resolved by the device of sequential atten¬ 
tion. As a problem arises, the subunits of the organization most con¬ 
cerned with that problem deal with it in terms of the constraints they 
take to be most important. When the next problem arises, another clus¬ 
ter of subunits deals with it, focusing on a different set of 
constraints. 

3) Standard Operating Procedures—Organizations perform their 
“higher" functions, such as attending to problem areas, monitoring infor¬ 
mation, and preparing relevant responses for likely contigencies, by 
doing '*lower 3 tasks, for example, preparing budgets, producing reports, 
and developing hardware. Reliable performance of these tasks requires 
standard operating procedures (hereafter SOPs). Rules of thumb permit 
concerted action by large numbers of individuals, each responding to 
basic cues. The rules are usually quite simple in order to facilitate 
easy learning and unambiguous application. Since procedures are "stan¬ 
dard”—-they do not change quickly or easily. Without these standard 
procedures, it would not be possible to perform certain concerted tasks. 
But because of standard procedures, organizational behavior in particu¬ 
lar instances appears unduly formalized, sluggish, and often inappro¬ 
priate. 

4) Programs and Repertoires—Organizations must be capable of per¬ 
forming actions in which the behavior of hundreds of individuals is 
carefully coordinated. Assured performance requires sets of rehearsed 
SOPs for producing specific actions, e.g., fighting enemy units or an¬ 
swering an embassy*s cable. Each cluster comprises a "program" (in the 
terms of both drama and computers) which the organization has available 
for dealing with a situation. The list of programs relevant to a type 
of activity, e.g., fighting, constitutes an organizational repertoire. 

The number of programs in a repertoire is always quite limited. When 
properly triggered, organizations execute programs; programs cannot be 
substantially changed in a particular situation. The more complex the 
action and the greater the number of individuals involved, the more im¬ 
portant are programs and repertoires as determinants of organizational 
behavior. 

5) Uncertainty Avoidance—Organizations do not attempt to estimate 
the probability distribution of future occurrences. Rather, organiza¬ 
tions attempt to avoid uncertainty. By arranging a negotiated environ¬ 
m ent , organizations regularize the reactions of other actors with whom 


The stability of these constraints is dependent on such factors 
as rules for promotion and reward, budgeting and accounting procedures, 
and mundane operating procedures. 


514 





ACDA/E-156 


they have to deal. The primary environment, relations with other or¬ 
ganizations which comprise the government, is stabilized by such 
arrangements as agreed budgetary splits, accepted areas of responsibili¬ 
ty, and established conventional practices. The secondary environment, 
relations with the international world, is stabilized between allies 
by the establishment of contracts (alliances) and "club relations" 

(U.S. State and U.K. Foreign Office or U.S. Treasury and U.K. Treasury). 
Between enemies, contracts and accepted conventional practices perform 
a similar function, for example, the rules of the "precarious status 
quo" which President Kennedy referred to in the missile crisis. 

Where the international environment cannot be negotiated, organi¬ 
zations deal with remaining uncertainties by establishing a set of 
standard scenarios that constitute the contingencies for which they 
prepare. For example, the standard scenario for Tactical Air Command 
of the U.S. Air Force involves combat with enemy aircraft. Planes are 
designed and pilots trained to meet this problem. That these prepara¬ 
tions are less relevant to more probable contingencies, e.g., provision 
of close-in ground support in limited wars like Vietnam, has had little 
impact on the scenario. 

6) Problem-directed Search—Where situations cannot be construed 
as standard, organizations engage in search. The style of search and 
the solution are largely determined by existing routines. Organiza¬ 
tional search for alternative courses of action is problem-oriented: 

it focuses on the atypical discomfort that must be avoided. It is sim¬ 
ple-minded: the neighborhood of the symptom is searched first, then, 

the neighborhood of the current alternative. Patterns of search reveal 
biases caused by such factors as specialized training or experience of 
various parts of the organization and patterns of communication within 
the organization. 

7) Organizational Learning and Change—The parameters of organi¬ 
zational behavior (mostly) persist. In response to non-standard prob¬ 
lems, organizations search and routines evolve, assimilating new situa¬ 
tions. This learning and change follows in large part from existing 
procedures, but marked changes in organizations do sometimes occur. 
Conditions in which dramatic changes are more probable include: 

a) Periods of budgetary feast. Typically, organizations devour 
budgetary feasts by proceeding down the existing shopping list. 
Nevertheless, government leaders who control the budget and are 
committed to change can use extra funds to effect changes. 

b) Periods of prolonged budgetary famine. Though a single year’s 
famine typically results in few fundamental changes in organi¬ 
zational structure and procedures, it often causes a loss of 
effectiveness in performing some programs. Prolonged famine. 


515 



ACDA/E-156 


however, forces major retrenchment. 

c) Dramatic performance failures. Dramatic change occurs (mostly) 
in response to major disasters. Confronted with an undeniable 
failure of procedures and repertoires, authorities outside the 
organization demand change, existing personnel are less resis¬ 
tant to change, and critical members of the organization are 
replaced by individuals committed to change. 


XIII.2.2.2.e Central Coordination and Control . Governmental action 
requires decentralization of responsibility and power. But problems do 
not fit neatly into separable domains. Each organization’s performance 
of its "job” has major consequences for other departments. Important 
problems lap over the jurisdictions of several organizations. Thus the 
necessity for decentralization runs headlong into the requirement for 
coordination. (Advocates of one horn or the other of this dilemma— 
responsive action entails decentralized power vs. coordinated action 
requires central control—account for a considerable part of the per¬ 
sistent demand for government reorganization.) 

Both the necessity for coordination and the centrality of foreign 
and military policy to the welfare of the nation guarantee the involve¬ 
ment of government leaders in the processes of the organizations who 
share power. Each organization’s propensities and routines can be dis¬ 
turbed by government leaders’ intervention. Central direction and per¬ 
sistent control of organizational activity, however, is not possible. 
The relation among organizations, and between organizations and the 
government leaders depends critically on a number of structural varia¬ 
bles including: 

1) the nature of the job, 

2) the performance measures and information available to govern¬ 
ment leaders, 


It has been suggested by Charles Wolff Jr. that a threshold 
phenomenon may be at work to displace the basic organizational processes 
from time to time. If the results of organizational processes diverge 
by more than some value, "a", from a Model I style calculation of ex¬ 
pected reasonable results, then forces emerge to change the organiza¬ 
tional processes. In every case "a" will be large (indeed, how would 
one measure it?). But the size of this parameter probably depends on 
such factors as whether there is an active systems analysis staff, 
whether the President takes a direct interest in the area, whether 
there is a degree of pluralism in the internal bureaucratic structure, 
and whether the external environment is favorable. 


516 




ACDA/E-156 


3) the system of rewards and punishments for organizational mem¬ 
bers , and 

4) the procedures by which human and material resources get 
committed. 

For example, to the extent that rewards and punishments for the members 
of an organization are distributed by higher authorities, these authori¬ 
ties can exercise some control by specifying criteria in terms of which 
organizational output is to be evaluated. These criteria become con¬ 
straints within which organizational activity proceeds. Constraint, 
however, is a crude instrument of control. Specification of relevant 
operational criteria for the activities of most government organiza¬ 
tions is incredibly difficult. Moreover, in the U.S. government, the 
leader’s control over critical rewards and punishments is severely 
limited. 

Intervention by government leaders does sometimes change the acti¬ 
vity of an organization in an intended direction, but instances are 
fewer than might be expected. As Franklin Roosevelt, the master mani¬ 
pulator of government organizations, remarked: 

The Treasury is so large and far-flung and ingrained in 
its practices that I find it is almost impossible to get the 
action and results I want .... But the Treasury is not 
to be compared with the State Department. You should go 
through the experience of trying to get any changes in the 
thinking, policy, and action of the career diplomats and then 
you’d know what a real problem was. But the Treasury and 
State Department put together are nothing compared with the 
Na-a-vy .... To change anything in the Na-a-vy, is like 
punching a feather bed. You punch it with your right and 
punch it with your left until you are finally exhausted, and 
then you find the damn bed just as it was before you started 

OO 

punching. 

John Kennedy’s experience seems to have been similar: "The State Depart¬ 
ment," he asserted, "is a bowl of jelly." 33 And lest the McNamara 
revolution in the Defense Department seem too striking a counter¬ 
example, the Navy’s rejection of McNamara’s major intervention in Naval 
weapons procurement, the F—111 B, should be studied as an antidote. 


32 Marriner S. Eccles, Beckoning Frontiers .(New York: Knopf, 1951), 
p. 336. 

33 Arthur Schlesinger, A Thousand Days (Boston: Houghton-Mifflin, 
1965), p. 377. 


517 





ACDA/E-156 


XIII.2.2.2.f Decisions of Government Leaders , Organizational persis¬ 
tence does not exclude shifts in governmental behavior because govern¬ 
ment leaders sit atop the conglomerate oi organizations. In spite of 
the limits of the leadership*s ability tc control changes in particu¬ 
lar organizations* goals or SOPs, many important issues of governmental 
action require that these leaders decide what organizations will play 
out which programs and where. Thus, stability of individual organiza¬ 
tions* parochialism and SOPs is consistent with some kinds of important 
shifts in the behavior of governments. The degree of these shifts is 
limited by the range of existing organizational programs. 

The leadership*s options for shifting governmental behavior at any 
point thus include: 

1) triggering program A rather than program B within a repertoire, 

2) triggering existing organizational routines in a new context, 
and 

3) triggering several different organizations* programs 
simultaneously. 

Additional leeway can be won by feeding an issue to one component of an 
organization rather than another, e.g., raising a strategic issue in 
budgetary guise or vice versa. Over the longer run leaders can create 
new organizations. Occasionally, they may even effect deliberate change 
in organizations by manipulating the factors which support existing or¬ 
ganizational tendencies. Even in these various choices, leaders rely 
for the most part on information provided by, estimates generated by, 
and alternatives specified by organizational programs. 


XIII.2.2.3 Dominant Inference Pattern 


If a nation performs an action of this type today, its organiza¬ 
tional components must yesterday have been performing (or have had 
established routines for performing) an action only marginally differ¬ 
ent from that action. At any specific point in time, a government con¬ 
sists of an established conglomerate of organizations, each with exist¬ 
ing goals, programs, and repertoires. The characteristics of a govern¬ 
ment’s action in any instance follows from those established routines, 
and from the choice of government leaders—on the basis of information 
and estimates provided by existing routines—among established programs. 
The best explanation of an organization’s behavior at jt is t - 1 ; the 
best prediction of what will happen at t + 1 is t^. This framework’s 
explanatory power is achieved by uncovering the organizational routines 
and repertoires that produced the outputs being examined. 


518 






ACDA/E-156 


XIII.2.2,4 General Propo sitions 

A number of general propositions have been stated in the presenta¬ 
tion of the focal concepts. This section will develop several of 
these propositions more fully. 


XIII.2.2.4.a Organizational Implementation . Activity according to 
standard operating procedures and programs does not constitute far¬ 
sighted, flexible adaptation to "the issue" (as it is conceived by the 
analyst). Detail and nuance of actions by organizations are determined 
predominantly by organizational routines, not government leaders’ 
directions. 

* 

1. SOPs constitute routines for dealing with standard situations. 
Routines allow large numbers of ordinary individuals to deal with numer¬ 
ous instances, day after day, without considerable thought. But this 
regularized capacity for adequate performance is purchased at the price 
of standardization. If the SOPs are appropriate, average performance, 
i.e. , performance averaged over the range of cases, is better than it 
would be if each instance were approached individually (given fixed 
talent, timing and resource constraints). But specific instances, par¬ 
ticularly critical instances that typically do not have "standard" 
characteristics, are often handled sluggishly or inappropriately. 

2. A program, i.e. , a complex cluster of SOPs, is rarely tailored 
to the specific situation in which it is executed. Rather, the program 
is (at best) the most appropriate of the programs in the existing 
repertoire. 

3. Since repertoires are developed by parochial organizations for 
standard scenarios that the organization has defined, programs available 
for dealing with a particular situation are often ill-suited. 


XIII.2.2.4.b Organizational Op tion s. The menu of alternatives defined 
by organizations in sufficient detail to be live options is severely 
limited in both number and character. The short list of alternatives 
reflects not only the cost of alternative generation, but more impor¬ 
tantly, each organization’s interest in controlling—rather than pre¬ 
senting—choices (for example, by serving up one real alternative framed 
by two extremes). The character of the alternatives, i.e., the location 
of the set of alternatives in the universe of possible alternatives 
relevant to the leader’s objectives, may differ significantly from the 
character of alternatives that would be presented by a team of five 
disinterested experts. (Thus, an "analysis gap" of a quite different 
type is involved.) The difference is a function of the configuration 


519 








ACDA/E-156 


of established organizations and their existing goals and procedures. 
These propensities have direct analogies for organizational informa¬ 
tion and organizationally-noticed problems. 

1. Alternatives that are built into existing organizational 
goals, e.g., both incremental improvements in each military service T s 
primary weapon system and major new developments in that line, will be 
adequate (i.e., compare favorably with the expert’s list, though with 
less sensitivity to costs). In contrast, alternatives that are con¬ 
trary to existing organizational goals, e. g., proposals for reducing 
the number of officers in a service, will be inadequate (i.e., compare 
poorly with the expert’s list). 

2. Alternatives that require coordination of several organiza¬ 
tions, e.g., multi-service weapon systems, are likely to be inadequate. 

3. Alternatives in areas between organizations, e.g., weapon sys¬ 
tems that are not represented by a major service component, are likely 
to be inadequate. 


XIII.2.2.4.c Limited Flexibility and Incremental Change . Major lines 
of organizational action are straight, i.e., behavior at one time _t is 
marginally different from that behavior at t - 1 . Simple-minded predic¬ 
tions work best: behavior at t 4- 1 will be marginally different from 
behavior at the present time t_. 

1. Organizational budgets change incrementally — both with re¬ 
spect to totals and with respect to intra-organizational splits. 

Though organizations could divide the money available each year by 
carving up the pie anew (in the light of objectives or changes in the 
environment), in fact, organizations take last year’s budget as a base 
and adjust incrementally. (Thus, the stability of service budgets 
noted above.) Predictions that require large budgetary shifts in a 
single year between organizations or between units within an organiza¬ 
tion should be hedged. 

2. Organizational priorities, perceptions, and issues are rela¬ 
tively stable. 

3. Organizational procedures and repertoires change incremental¬ 
ly. 

4. New activities typically consist of marginal adaptations of 
existing programs and activities. 


520 





ACDA/E-156 


5. A program, once undertaken, is not dropped at the point where 
objective costs outweigh benefits. Organizational momentum carries it 
quite beyond the loss point. 


Xill*2.2.4.d Goals and Tradeoffs . Since organizational goals are 
formulated as constraints, i.e., imperatives to avoid falling beneath 
specified performance levels, behavior departs from expectations based 
on an analysis that assumes a unitary rational actor. 

1. Tradeoffs, i.e., marginal comparisons among goals, are neg¬ 
lected. 

2. Incompatible constraints are attended to sequentially, the 
organization satisfying one while simply neglecting another. 


XIII.2.2.4.e Imperialism . Most organizations define the central 

goal of '‘health" in terms of growth in budget, manpower, and territory. 
Thus, issues that arise in areas where boundaries are ambiguous and 
changing, or issues which constitute new territories, are dominated by 
colonizing activity. 


XIII.2.2.4.f Options and Organization . Organizations or sub-units of 

an organization are often created in order to pay special attention to 
a neglected aspect of a problem. Leaders see this as a way of increas¬ 
ing options by providing information and alternatives that would other¬ 
wise be unavailable. But the existence of options affects the proba¬ 
bilities of choice, for the organizations created to provide an option 
also generate information and estimates that are tailored to make the 
exercise of that option more likely. 


XIII.2.2.4.g Administrative Feasibility . Adequate explanation, ana¬ 

lysis and prediction must include administrative feasibility as a major 
dimension. Most cost-benefit analysis neglects this consideration. 
Thus, a considerable gap separates what leaders choose (or might ratio¬ 
nally have chosen) and what organizations implement. 

1. Organizations are blunt instruments. 

2. Projects that demand that existing organizational units depart 
from their established programs to perform unprogrammed tasks are rare¬ 
ly accomplished in their designed form. 


521 







ACDA/E-156 


3. Projects that require coordination of the programs of several 
organizations are rarely accomplished as designed. 

4. Where an assigned piece of a problem is contrary to existing 
organizational goals, resistance will be encountered. 

5. Government leaders can expect that each organization will do 
its ’'part” in terms of what the organization knows how to do. 

6. Government leaders can expect iicomplete and distorted infor¬ 
mation from each organization concerning its part of the problem. 


XIII.2.2.4.h Directed Change . Existing organizational orientations 
and routines are not impervious to directed change. Careful targeting 
of major factors that support routines such as personnel, rewards, 
information, and budgeting, can effect major changes over time. But 
the terms and conditions of most political leadership jobs — short 
tenure and responsiveness to hot issues — make effective, directed 
change uncommon. 


XIII.3 POTENTIAL NON-MILITARY USES OF THE MILITARY 

Pressing domestic priorities require public resources. In addi¬ 
tion to increasing Federal revenues, most discussion has centered on 
two major categories by which Federal resources devoted to domestic 
problems could be increased. The first is to shift: public money from 
defense to the domestic sector. A second category is to use resources 
in the military budget for domestic purposes. For example, Israel has 
used her military to educate, train, build, resettle and assimilate. 
Part II of this essay addresses this second track. Section 1 presents 
a menu of alternative non-military uses of the military. This menu 
reflects the standard list being discussed by current analysts of this 
problem. Since current analysis reflects little sensitivity to orga¬ 
nizational and administrative factors, many of these proposals are, in 
important ways, unrealistic. Section 2 examines in greater detail two 
program items from the analytic menu — Project Transition and Project 
100,000 — in each case noting the gap between analytic alternative and 
outcome. 


522 



ACDA/E-156 


XIII,3.1 The Analytic Menu of Choice 


XIII.3.1,1 Manpower Pr oblems 

Employment, education and training have been the "growth stocks" 
in public policy over the last twenty years. Today, however, we have 
six years of inconclusive Manpower Training and Development Act (MTDA) 
projects, an ill—managed state employment service, and crumbling urban 
school systems as mute testimony that civilian institutions have not 
coped entirely successfully with these vital needs. Analysts have fre¬ 
quently noted these areas as logical places where the military, through 
a wide range of programs, could make much-needed contributions. 


XIII.3.1.1.a Recruitment . The striking characteristic of the life of 
the ghetto resident is that most stable institutions are closed to him. 
A civilian job requires a high school diploma; the Services require him 
to be in the 31st percentile on the Armed Services Qualifying Test 
(ASQT). There have been numerous proposals for a lowering of the 
entrance requirements which would give these young men an opportunity 
for a break with the "culture of poverty" and put them into a more 
orderly, disciplined environment. The point is that by taking individ¬ 
uals from disadvantaged backgrounds, treating them "no different from 
anyone else," and persuading them that they can do a job for which they 
will be rewarded, the Services can provide a more benign socialization 
than what the society offered these individuals. According to this 
reasoning, the Services should not only accept, but actively recruit 
those who have failed elsewhere. Thus a variety of the following tradn- 
ing/career inducements to court prospects could be offered: 

1. High school diploma/military service package. A high school 
drop-out could enlist for five or six years. The first year would be 
spent completing his high school education, under conditions quite*, 
different from his earlier experiences in an urban school. He would 
then serve his hitch undifferentiated from other servicemen. 

2. Training with enlistment option. If a long enlistment is 
unattractive, the Services could provide a one-year enlistment which 
would consist of skill training in anything from baking to electronics. 
After a year the serviceman could either enlist through standard chan¬ 
nels or return to civilian life with a marketable skill. As long as 
there is some slack in military educational systems, the costs of such 
a program would be very low. Furthermore, to hold down costs even 
more, this program could omit the usual Service benefits such as those 
that come under the G.I. Bill. 


523 






ACDA/E-156 


Such a program would obviously not be costless, but the Services* 
comparative advantage in socialization would suggest that the addi¬ 
tional expense would be a wise investment. 


XIII.3.1.1.b Training and Education 

The previous section has touched on some suggested Service contri¬ 
butions in terms of recruitment policy in the education area. These 
are all the more important since vocational education in most public 
school systems is a failure. While academic curricula in secondary 
schools have been influenced by college teachers interested in the 
quality of their raw materials, vocational education has been virtually 
ignored. Certain analysts argue that only the military has a large 
s :ale vocational education system in working order which could be used 
to good purpose. Proposals forwarded include: 

1. Expanded educational research by the military. Research, 
especially in vocational education, is very difficult in the civilian 
sector because of the complex politics involved. The Services* enor¬ 
mous educational system is an ideal laboratory for testing the effective¬ 
ness of various teaching techniques with soldiers of diverse backgrounds. 
The military has, of course, been in the business of educational 
research for years; but there is a large scope for expansion of the 
projects and for improved dissemination of information to the civilian 
sector. 

2. Project Transition. Although the Services* vocational educa¬ 
tion system is large, not all servicemen leave with a marketable skill. 
Project Transition is one effort to meet this problem; it could be 
expanded and deepened. 

3. Craft training. One of the major problems in integrating the 
building trades is a lack of blacks with skills comparable to those of 
white construction workers. A crash project by the Services to give 
blacks craft training could go far toward removing this barrier. 

4. Spillover into the civilian sphere. The Department of Defense 
had developed manuals, training films and other teaching aids. These 
could be made available to civilian programs at a fraction of the cost 
of separate development of similar materials. In particular, work 

done in computer aided instruction (CAI) should have important spillovers 
into the civilian sector. 


524 



ACDA/E-156 


XIII.3.1.1.c Post-Service Employment 

A vigorous recruitment and education program would naturally ease 
employment problems. However, more direct measures that lie within 
the military's competence have been suggested. 

!• Discharge policies. The stacking up of untrained people in 
a few urban areas creates many of our most acute societal problems. 
Migration and settlement patterns of discharged servicemen aggravate the 
problem. By compiling and presenting information on opportunities 
outside large cities and accurate data on urban conditions, the Services 
might be able to help the dischargees fitid areas in which their indi¬ 
vidual and social productivity would be higher. 

2. Contract placement. The present procurement policy is to 
award contracts to the lowest bidder, a procedure which counts only 
monetary benefits to the Service. A broadening of criteria for contract 
placement to allow some weight to societal benefits would encourage the 
Services to let contracts (or subcontracts) to contractors employing 
ghetto and underpriviledged manpower (if these contractors 1 bids were 
within a fixed percentage of competitive bids.) These contracts 
would then provide one of the scarcest items in the ghetto—steady, 
reasonably well-paying, legal jobs. 

3. Job matching. The Services employ well over a million civilians 
in non-managerial, low skill jobs. Instead of filling these positions 
from the civil service in conventional fashion, a special program to 
hire from depressed regions and urban ghettos could be instituted. By 
putting together a job recruiting package including special pre-examina¬ 
tion study guides, convenient testing locations, and resettlement plans, 
the Services could tremendously increase labor mobility. Because of the 
numbers involved, realizable economies of scale might make the package 
cheaper for the Services than for any civilian industry. Moreover, in 

an expanding economy, the value of moving labor from zero to positive 
productivity is obvious. 


34 An effort in this direction was made late in the Johnson Admin¬ 
istration. The then Secretary of Defense Clark M. Clifford raised the 
question (in a speech before the National Security Industrial Associa¬ 
tion) whether in awarding contracts should the Pentagon consider "not 
only whether the best weapon can be purchased at the cheapest price, 
but also whether the measurement of social utility should be included 
in the award decision?" See "Pentagon Widens Do-Gooder Role," Business 
Week, No. 2041 (October 12, 1968), pp. 79-80. Presumably, the idea 
was dropped by the Nixon administration. 


525 








ACDA/E-156 


XIII.3.1.2 Health Care 


The contrast between the quality and distribution of medical care 
in the Unit^ States and that in other industrialized nations is 
disturbing. In cost-benefit terms, the performance of the health 
care sector is a serious, national disgrace. Experts repeatedly insist 
that substantial improvements in the provision and delivery of health 
care can be made, and the Services are reputed to be in an excellent 
position to contribute on both counts. 


XIII.3.1.2.a Experimentation 

Potential for experimenting in the health care industry is, at 
present, extremely limited. Hospital administrators are not typically 
innovators, doctors are a notoriously conservative group, and the pa¬ 
tient is an uninformed and rather helpless consumer. Patient care, 
hospital organization, information handling and general procedures have 
changed in large part in response to flashy new technologies or doctors 1 
preferences rather than efficiency or economy. Economic analysts see 
several areas as bastions of non-rationality. 

1. Routinization of decision-making. When a patient with an 
ailment appears, the physician must make a series of decisions in terms 
of diagnoses and treatment. Such decisions affect not only the welfare 
of the patient, but the costs, particularly when properly viewed as 
opportunity costs, of treating him. There must be some general pro¬ 
cedures (i.e. SOPs) that are most efficient in the sense of obtaining 

a cure, trading off time required for cure and costs of diagnoses. The 
Services, taking advantage of their almost unique control over medical 
professionals, can develop these SOPs and make them available to the 
private health care industry. 

2. Hospital organization. The Services own a medical system more 
extensive than those owned by half the countries in the world. The Air 
Force alone operates over one hundred hospitals ranging from 25 to 1500 
beds and provides primary medical care for over 2 million people. By 
reorganizing a group of its hospitals on the basis of problem rather 
than traditional medical specialty (e.g. cardiovascular/gastrointestinal 
rather than medical/surgical) or by experimenting with different degrees 
of decentralization, the Services could provide a new and badly needed 
conventional wisdom. 


35 

U.S. Congress * 90th Congress, 2nd Session, Health Care in America 
Hearings before the Subcommittee on^ExecutiveReorganTZatlOnof the Com¬ 

mit teeon Government Operations, U.S. Senate (Washington: Government 
Printing Office, 1969) , two volumes. 


526 








ACDA/E-156 


XIII.3,1.2,b Emergency services . The problem of rapid treatment of 
victims of highway traffic accidents has become increasingly acute. 
Ambulances are clearly not a sufficient answer: no vehicle, regardless 
of number of sirens, can get through a genuine freeway jam. However, 
helicopter rescue equipment is standard at all bases. The helicopters 
could be made available to Highway Patrol Departments in emergencies 
for fast delivery of injured victims to the hospital. The costs, espe¬ 
cially weighed against the savings in human costs, should be relatively 
low. Furthermore, if helicopter rescue service is to be manned by 
local police, Service medical and paramedical staffs could train local 
personnel in extrication and emergency care during transport. 


XIII.3.1.2.c Community health . As attention increasingly focuses on 
hunger it becomes obvious that many of the rural poor lack the most 
rudimentary medical care—standard innoculations and simple corrective 
surgery for example. In World War II, the Services, especially the 
Army, developed highly efficient techniques for examining and innocu- 
lating large numbers of people. Analysts claim that the same effort 
could be directed toward rural poor. There is some precedent for this: 
the Turkish army, as part of its modernization effort, provided basic 
medical services to peasant villages. 


XIII.3.1.2.d Hospital costs . One of the major causes of the extra¬ 
ordinary increase in hospital costs is the capital equipment account— 
e.g., kidney machines and open heart surgery facilities. In communi¬ 
ties where a military hospital 1 s equipment is not being used to 
capacity some '’time-sharing” plan for these facilities could be put 
together with local medical people at almost no real (i.e., opportunity) 
cost to the military. 


XIII.3.1.3 Housing 


Housing is without question one of the pressing urban problems. 
Very little low cost housing is built; a great deal is desperately 
needed. The explanation is hardly mysterious: present construction 
methods make low cost housing an unprofitable venture, while at the 
same time local building codes and craft unions limit civilian possi¬ 
bilities of new departures. Military construction, i.e., base 
construction, is not bound by either constraint. Both political and 
labor costs to the military of experimentation in construction are 
reportedly much lower than they would be in the civilian sector. 
Furthermore, the diversity of military construction would permit wide 
technological experimentation which could have payoffs within the 
military sector as well. 


527 






ACDA/E-156 


Experimentation helps in the long run. Meanwhile, analysts can 
point to closed military bases standing empty, bases that contain hous¬ 
ing which is superior to much presently inhabited. Though the number 
of units of empty, usable housing on bases is much smaller than many 
analysts suggest, if the transportation problem could be managed, 
civilians from urban ghettos could occupy vacant bases at little cost. 
Even the move itself could be handled by the military with its experi¬ 
ence in relocating people. 


XIII.3.1.4 Public Order. Preserving civil order in the face of grow¬ 
ing militancy among blacks, students and other groups demands more 
efficient police departments. Indeed there has already been some 
military involvement in these problems. However, direct involvement is 
merely one end of a very rich spectrum. Other possibilities include: 

1) Providing unclassified information on command and control 
systems used by the military, a low cost operation. 

2) The Services could allow local police to purchase standardized 
hardware through the Department of Defense, thus enjoying both reduced 
per unit cost (through economies of scale) and efficiency of standard¬ 
ization. 

3) Training of civilian police forces, based on years of military 
research on conflict resolution, with special attention to the problems 
of information flows, bureaucracy, psychology of escalation and deesca¬ 
lation. 

4) The Services can attempt to increase the number of minority 
group policemen. At present minority groups get no special career 
direction. By encouraging black and Puerto Rican servicemen to apply 
for MP work and by providing them with post-service employment informa¬ 
tion, the Services could increase high quality minority group represen¬ 
tation on urban police forces. 

5) In crisis situations, men with special training in communica¬ 
tions, dispatching and transport are urgently needed. Local bases 
could arrange to make such specialized manpower available to police in 
grave emergencies. 


XIII.3.2 Two Alternatives Examined: Project 100,000 and Project 

Transition 


This menu of analytic alternatives can be made more concrete by 
developing in greater detail two particular designs actually under- 


528 







ACDA/E-156 


taken. Furthermore, these cases are especially instructive for this 
essay 1 s general argument. 

XIII.3.2.1 Project 100,000 

Project 100,000 can be considered a prototype of the kind of man¬ 
power training project usually suggested by those who feel the Services 
can make great contributions in dealing with the hard core—with those 
who are not strongly attached to the labor force. Project 100,000 was 
christened in an August 1966 McNamara speech before the Veterans of 
Foreign Wars in New York City in which he declared: 

the poor of America have not had the opportunity 
to earn their fair share of this nation’s abun¬ 
dance , but they can be given an opportunity to 
serve in their nation's defense and they can be 
given an opportunity to return to civilian life 
with skills and aptitudes which for them and 
their families ^11 reverse the downward spiral 
of human decay. 

More specifically, the purpose of Project 100,000 was to induct 
large numbers of men who ordinarily would have been disqualified pri¬ 
marily because of failing scores on standardized tests and provide them 
with marketable skills. 

Project 100,000 initially involved the lowering of entrance scores 
on the Armed Forces Qualifying Test (AFQT) to the 16-30 percentile 
group from a previous 31% cutoff. (There were also revisions of the 
physical standards, but only a very small number of persons, 8800 or 
less than 1% of those taken from October 1966 through September 1968, 
were admitted under this ruling.) In December of 1966 standards were 
further lowered to provide for induction of those who scored as low as 
the 10th percentile if (1) they were high school graduates or (2) they 
were able to pass two out of seven supplementary aptitude area tests. 

These inductees—the "new standards men"—were to be allocated 
among the Services on the basis of total number of enlisted entrants 
each Service required. They were not to be assigned to special units 
or given "vestibule" orientation; they were to be randomly distributed 
among the eighteen training centers. However, in recognition of poten¬ 
tial difficulties, the following provisions were made to furnish 
remedial education and special supplementary training. 

—— 

New York Times, August 24, 1966, pp. 1 and 1$. 


529 





ACDA/E-156 


1) Although it had been decided not to segregate these new stand¬ 
ards men, special training units, open to all inductees, were estab¬ 
lished to provide added assistance with the basic training curriculum. 

2) Low scores on the AFQT are highly correlated with poor read¬ 
ing skills. Therefore literacy training units were set up to upgrade 
reading ability. 

i 

3) A "buddy system” was established whereby better qualified men 
within the basic training unit provided special assistance to all low 
scoring men whether Project 100,000 enrollees or not. 

4) It was recognized that special teaching techniques might be 
necessary to get the new standards men through the more technical 
training courses. The Department of Defense began a program of educa¬ 
tional research on alternative methods. 

Unfortunately, not enough time has elapsed since the inception of 
the program to evaluate its most significant aspect, its impact on the 
post-service careers of its participants. However, the records of the 
men’s service careers are available and are of great interest. For 
there is a reasonable argument that Project 100,000 is a valid test 
case in determining whether any manpower operation can produce outcomes 
that resemble the programmed alternative. If any such undertaking could 
succeed, it can be maintained, then Project 100,000 should. It was 
initiated at the top through Secretary McNamara’s August 1966 speech. 

In addition, it represented an area in which the leadership had a known 
strong personal interest. Thus responsibility for implementation was 
given to the Assistant Secretary for Manpower and Training who had a 
relatively large block of time to devote to the project. Because of 
1 his high-level interest a considerable amount of planning was done 
concerning not only who should be taken but also what exact procedures 
would be used for dealing with the enrollees. This planning was evi¬ 
denced by the development of literacy training and the buddy system. 
Furthermore, the program was begun at a time when the military, due to 
sustained fighting in Vietnam, was badly in need of manpower. It be¬ 
comes clear, then, that this program is in no way a straw man; the 
extent to which outcomes matched the McNamara alternative should be 
suggestive of the potential effectiveness of most projects in the man¬ 
power area and of the adaptability of large organizations. 

A reasonable set of in-service performance criteria would most 
likely include the following questions: 

A. Did the project take the men it was intended to take? 


530 


ACDA/E-156 


Statistical profiles of new standards men show that this group included 
more blacks, more Southerners, and men with less formal education and 
poorer reading skills than a control group. (See Table 4 for a 
detailed statistical breakdown of the group.) 

B. Did the hew standards men stay in the program? 

In general the program has not done badly. The attrition rate for the 
Services as a whole has been 9%. While considerably higher than the 
rate for a control group (which was only 2%), losing only approximately 
one out of 10 is a record that no civilian manpower program has been 
able to match. On the other hand, however, records among the Services 
differ considerably. Attrition rate for the Army is 5.5%, the Air 
Force 12.2%, the Navy 12.5% and the Marines 10. 8%. (These are aver¬ 
age rates from September, 1966 to June, 1968.) Though at first glance 
these disparities may seem puzzling, they can be explained in organiza¬ 
tional terms as a consequence of Service recruitment policies. 

Typically the Navy, Air Force and Marines have not depended upon 
draftees but have filled their ranks with volunteers. In such a rich 
environment they were able to spare themselves the pain of dealing 
with recalcitrant inductees; men who did not appear to be shaping up 
during basic training were simply let go. Thus the non-commissioned 
officers who were in direct command of men had little experience in, or 
routines for, dealing with problem recruits. Not surprisingly, the 
project’s attrition rate for these Services was higher. 

C. What skills and aptitudes did the enrollees acquire? 

Ideally the men should have been put into specialties like "electronic 
equipment repair", "craftsman", "mechanical equipment repair" which 
would "reverse the downward spiral of human decay." Statistics on the 
first two years seem to indicate that a disproportionately high number 
are being assigned to combat duty, classified as "infantry, gun crews, 
and allied specialties" and "service and supply handling." In fact, 
these two specialties accounted for the placement of over 50% of the 

new standards men for the Armed Services as a whole. An examination of 

/ 

the Caucasian and non-Caucasian breakdown shows that 43% of the new 
standards blacks were assigned to combat training as against 34% of new 
standards white and 30% of regular trainees. Only 1.9% were assigned 
to "electronic equipment repair" compared with 6.2% of a control group; 
4.7% in communications versus 7.3%; 1.2% in medical and dental special¬ 
ties, about one-third of the usual 3.7%. These assignments, incon- 

— 

Harold Wool and Eli Flyer, "Project 100,000" in Peter Doringer 
(ed.), Programs to Employ the Disadvantaged (Englewood Cliffs, New 
Jersey : Prentice-Hall, 19(42), pp . 207-245. 

38 Ibid., Table 3, p. 49. 


531 





ACDA/E-156 


G 


w 

X 

H 


I 

I 

P- 

3 

O 

U 

o 


o 

V4 


4-> 

CO 

•H 

U 

G 


CM 

3 

O 

M 

O 


O 

U 

U 

c 

o 

cj 


c 





o 




rH 

o 




G 





4-J 

CM 




o 

O 




H 

X) 




4 

G 





cd 


CO 





4-5 


G 

CO 


G 

C 

G 

•U 


G 

G 

X 

G 

00 

M 

•H 

4-> 

G 

sO 

u 

g 

o 

M 

Os 

G 

G 


4-5 

rH 

X 

cj 


G 



3 


W 

x 

G 

G 



cj 

T3 

a 


£ 

M 

U 

i 

o 

CO 

G 

G 

G 

M 

x) 

X 

X> 

O 

cd 

H 


G 

55 

g 

G 

1 

G 


55 

XJ 


u 



G 

sO 

CO 



G 

sO 




4-5 

o 




CO 

rH 

g 


G 



55 


G 


H 



•H 

G 

g 



CO 

55 

X 



G 

s 

o 



O 


4-1 



3 

sw 

CJ 



G 

O 

O 



CJ 


cj 

CNJ 

• 

CO 

00 


cj 

00 

X 


CM O O O 00 


O 

o 


CO so 00 CM O 

CM lO rl 


o 

o 


o 

• 

o 

o 


6^ 

m 


CO rH so 
• • • 

m oo so 

CM so 


O CO CO <f O 


o 

o 


co o rH o m 

rH 


o 

O 


00 H H 
I • • • 

| CO in rH 
cm r-. 


CM ON CM CM m 


o 

o 


I— vO so N CM 

<r co 


o 

o 


rH 

• 

00 

CO 


on r- st 
I • • • 

I CM CO CO 
cm r- 


o 

o 

O 


CM O st CM CM 


>0- sO U0 CO rH 

m co 


o 

o 


c 

0 ) 

o 

u 


4-5 









G 


O 


G 







Ch 


G 


O 







s>» 


M 


*H 









G 


4-1 







XJ 


X 

a 

3 

G 






G 


CJ 

*H 

X 

G 






4-5 



4 -» 

•H 

M 






G 


X) 

CO 

U 

O 






rH 


G 

*H 

4-5 

CJ 






a, 


4.5 

M 

G 

CO 






B 


CJ 

<D 

•H 







o 


a) 

4-5 

TJ 

CL) 






CJ 


rH 

CJ 


rH 

V 4 







G 

G 

4 J 

•H 

G 





G 

/—N 

CO 

U 

c 

4-5 

> 





G 

G 


G 

(U 

G 

O 





X) 

O 


X 

cj 

g 






G 

*H 


CJ 

M 

u 

X) 





U 

4-5 



0 ) 

M 

G 

o 

o 

m 

rH 

O 

3 



a 

G 

G 

CO 

CM 

rH 

G 


X 



S-/ 

P-. 


1 

1 

1 

4-5 

rH 

•H 





rH 

rH 

sO 

o 

O 

o 

H 



0 ) 

H 

CO 

CM 

rH 

rH 

H 

O 

X 



o 

O' 






X 

G 



G 

X 






a 

*H 



Pti 

<i 






co 

XJ 


SO 

rH 

I 

CO 


CM 


I 

Os 


C/D 

(0 

0 ) 


U 

O 


oo 


G 

u 

o 

H 


G 

TJ 

cd 

u 

o 


o 

o 

X 

o 

CO 

TJ 

§ 

00 

c 

•H 

cd 

0 ) 

pci 

G 

cd 

•H 

T3 


Os ON 

• • 

O rH 


rH SO 
• • 

sO O 


rH O 
• • 

sO iH 


i—I CO 
• • 
SO rH 


^5 

<r 

00 

CM 

O 

o 

o 

<r 

o 

o 

X 

[o 

CM 

rH 

• 

1 • 

• 

• 

• 







• 

• 

o 

1 X 

rH 

CM 

o 

CM 

o 

m 

m 

r^. 

o 

X 

o 

X 


CO 

X 

o 

»H 


CO 


rH 


o 

rH 


rH 


CO 

rH 

0 ) 

> 

0 ) 

X 


G 

> 

0 ) 

X 

00 

g 

•H 

T3 

cd 

g 

Pd 


0 ) 

> 

0 ) 

X 

a) 

x> 

cd 

n 

o 


o 

o 

X 

a 

co 


532 
























ACDA/E-156 


cd 


P4 

d 

o 

u 

o 


o 

u 

X 

d 

o 

<J 





rH 




cd 




X 




o 




H 


CO 




4-1 


5-i 


d 

d 

0) 


cd 

cd 

X 


u 

•H 

X 


4-> 

CO 

O 


d 

cd 



w 

o 


X 


d 


0) 

CO 

cd 


d 

x 

cj 


d 

M 

i 

o 

•H 

cd 

d 

X 

X 

X 

o 

Of 

d 

d 

2 

05 

o 

cd 


53 

o 

X 




CO 



<r 

£ 




05 


d 

w 

23 


cd 

X 




PQ 



CO 

<2 



cd 

H 



o 




d 




cd 




CJ 


o 


o 

ON 

o> 

in 

<r 

r^* 

o 

o 

uo 

UO 

CO 

CO 

o 

r-". 

o 

CM 


rH 

CO 

CM 

iH 

CM 


^5 


m oo n 


CM vO 00 


CO CM 


<r co 


o 

05 

3 

o 

X 


5 o\ 

MD CO 

CO CO VO 

cm o <r co 

CM O'- 

5 r-» 

CO CM 

r>- uo X 

CM rH CO CM 

CO CO 

3 rH 

rH CM 

rH <t 

CM rH rH rH 



5 vD 

UO ?H 

C7n 

O CO CM 

CO CO O CO 

<f CO 

5 CM 
5 

O cm 

vD 

CM <1- CO 
rH 

CM rH CO O- 
r-> 

cm <r 
cm in 


5 CM 

CO CO 

<r n CM 

co cm r--. 

O'- O 

5 <r 

rH CM MD 

<r cm <f 

CN 4 O -<f 

o <r 

5 rH 

rH rH 

rH 

CO rH rH 



o 


iH 

U0 

MD 

UO 

rH 

CM 

O 

CM 

o 

VO 

CO 

CO 

o 

o 

UO 

uo 

\D 

CO 

o» 

MD 

v£> 

CO 

rH 

vD 


CM 

o 

rH 

CM 


rH 

CM 

rH 


CO 

rH 


rH 

rH 


rH 









rH 

X 



rH 

rH 











cd 

cd 



cd 

cd 











5-4 

5-1 



5-4 

X 









a 


4-J 

4-J 



4-J 

X 






CO 





d 

d 


CJ 

d 

d 





X 

05 



4-1 


05 

05 


•H 

05 

05 




a 

cd 

4-J 



d 


Cd 

o 


4-> 

o 

CJ 




*H 

05 

cd 


X! 

cd 

rH 




d 






4-1 

5-< 

4-1 


d 

rH 

cd 

X 

X 


cd 

X 

X 




CO 

c 

C/3 


Cd 

4-> 

5-4 

4-5 

4-J 


rH 

X 

X 




•H 




rH 

<2 

4-J 

5-4 

5-J 


4-> 

d 

d 


d 


X 

a 

X 

4-J 

00 


d 

O 

O 


<2 

o 

o 


*H 

CJ 

05 

♦H 

a; 

CO 

d 

05 

05 

23 

53 



CO 

C/3 


cd 

•H 

4-J 

X 

4-J 

cd 

w 

i—1 

CJ 




X 




X 

X 

a 

pH 

•H 

05 


X 


4-J 

4-J 


4-J 

X 

X 


d 

•H 

cd 

cd 

d 

43 


X 

X 

CO 

CO 

X 

d 

CO 

CO 


d 

O 

X 

5-4 

x 

4-1 

a) 

*H 

4J 

cd 

05 

4-> 

o 

cd 

05 

X 

o 

cd 

cd 

00 


X 

23 

S 

5-4 

w 


d 

CO 

w 


CO 

X 


X 

O 

rH 

O 



O 



o 




05 



o 

05 

cd 

23 



23 



C/3 








X 

o 

H 


533 


See next page for Source and notes. 






































ACDA/E-156 


TABLE 4 (continued) 


Entrants selected by each Service as representative of accessions 
during October, 1966 - September, 1968, under previous mental standards. 

^Caucasian - 90.9%, Negro - 8.8%, Other - 0.3% 

Based on total accessions during period, exclusive of new standards 
entrants. 

^The states within each geographic area are as follows: 

New England: Connecticut, Maine, Massachusetts, New Hampshire, Rhode 

Island, Vermont 

Middle Atlantic: New Jersey, New York, Pennsylvania 

East North Central: Illinois, Indiana, Michigan, Ohio, Wisconsin 

West North Central: Iowa, Kansas, Minnesota, Missouri, Nebraska, 

North Dakota, South Dakota 

South Atlantic: Delaware, Florida, Georgia, Maryland, North Carolina, 

South Carolina, Virginia, Washington, D.C., West Virginia, 
Puerto Rico 

East South Central: Alabama, Kentucky, Mississippi, Tennessee 
West South Central: Arkansas, Louisiana, Oklahoma, Texas 
Mountain: Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, 

Utah, Wyoming 

Pacific: Alaska, California, Hawaii, Oregon, Washington 

SOURCE: Harold Wool and Eli Flyer, ''Project 100,000" in Peter 
Doringer (ed.). Programs to Employ the Disadvantaged 
(Englewood Cliffs, New Jersey: Prentice-Hall, 1962), pp. 

207-245. 


534 




ACDA/E-156 


gruous in terms of the stated purposes of the program, are predictable 
in terms of the procedures that each Service uses in assigning its men 
to specialties, the formal aptitude tests. Since no one had bothered 
to modify the test, the new standards men fared poorly and their 
assignments reflected this measure. 

No one intended to subvert the aims of the program. Racist atti¬ 
tudes need not be invoked to explain the assignments of blacks to 
’’cannon fodder” brigades. Rather, these people entered the system and 
were given assignments according to ASQT scores and placement SOPs. 

They were not retested because the Services have no procedures for 
doing so. They were tested upon entrance, rather than after sp^gial 
literacy training because the Army always does things that way. 

D. What options did the Service open to the disadvantaged? 
Clearly, for many of the new standards men, particularly Southern 
blacks, a Service career is a live option. However, the majority of 
new standards men enrolled in 1967 cannot re-enlist. As mentioned 
above, it had been decided that new standards men should not be segre¬ 
gated. Thus their eligibility for re-enlistment was determined by 
existing Service regulations. Men who originally test in group IV 
(below 31%) on the AFQT are ineligible for re-enlistment without pass¬ 
ing supplementary skill knowledge tests. Formal testing rather than 
performance measure is used because of the notorious unreliability of 
the rating systems. While the performance of the new standards men 
has been satisfactory (as marked by the attrition rate and disciplin¬ 
ary record) their scores on standardized tests do not permit re¬ 
enlistment. The organizational interest in the testing system is 
understandable; no Service wants to retain "unpromotables” who clog a 
seniority-orientec system. Given such an organizational process, one 
could have suspected the outcome. 


XIII.3.2.2 Project Transition 

Project Transition, like Project 100,000, was aimed at ascertain 
unskilled portion of the population. Both were concerned with skill 
training; but where Project 100,000 emphasized increased opportunities 


39 


Ibid. 


/+0 These points should not be misinterpreted as a suggestion 
that the program has been a failure. In fact, in spite of these 
limits, the socialization effect has been significant. 


535 





ACDA/E-156 


for enlistment, Project Transition centered on training those men who 
were near the end of their Service term. 

President Johnson, in the 1967 Manpower Report , observed that 
'‘There are, of course, some military specialists whose training does 
not lead directly to civilian employment" and thereupon instructed the 
Secretary of Defense "to make available, to the maximum extent pos¬ 
sible, inservice training and educational opportunities which will 

increase their chances for employment in civilian life." 

* 

The presidential mandate was implemented by the Secretary of 
Defense who saw four needs of discharged servicemen: counseling, 
skill training, education and job placement. Program guidelines estab¬ 
lished included: 

1. Eligibility would be open to enlisted men with less than six 
remaining months of service. 

2. Priority was to be given to disabled combat personnel with no 
civilian related skill and those with ASQT and aptitude scores so low 
as to be ineligible for re-enlistment. 

3. Project Transition would be entirely voluntary. 

4. Basic educational skills would be emphasized for those with 
less than a high school education. 

5. All courses would be job oriented. Skill training would 
reflect actual job requirements. 

6. Maximum support and participation would be sought from both 
public and private sources within the civilian sectors. If private 
employers were unable or unwilling to provide training, available 
capacity for civilian-oriented occupational training on the base it¬ 
self would be used. 

7. Job placement would be done in collaboration with the United 
States Employment Service. 

8. Follow-up provisions would be made. 


Manpower Report of the President Transmitted to the Congress, 
April, 1967 (Washington: Government Printing Office, April, 1967), 
p. xviii. 


536 





ACDA/E-156 


Project Transition thus was designed as a full-service, large 
scale training and placement project. We must look further to see how 
closely the outcome approached the chosen analytic alternative. 


While performance in the program to date has been highly praised, 
it is at present a rather small scale operation. Of roughly one mil¬ 
lion servicemen discharged in 1968, only 47,000 completed training 
under a Transition project. Since it was set up for experimental pur¬ 
poses as an extensively decentralized operation, the vigor with which 
it is pursued at any base depends on the attitude and interest of the 
base commander. There has been a self-selection process at work. Only 
those interested participated. And participating commanders tended to 
select "volunteers” for entrance into the program. A commander with 
enough interest in education to volunteer to supervise this project is 
interested enough and close enough to guide it through the bureaucratic 
shoals that await it. However, the mean of organizational performance 
cannot be deduced from the performance of the marginal units . If the 
experiment is expanded so that participation becomes obligatory for 
each base commander, it is unlikely that the tender loving care will 
continue. 

In particular, the menu of alternative training offered to par¬ 
ticipants is likely to narrow if Project Transition is run on a large 
scale. As the average personal interest of the commander declines, the 
importance of the compatibility of organizational SOPs and program 
goals is likely to increase. Already there is evidence that the happi¬ 
est collaboration has been with civilian organizations of similar 
operating styles. State, and local law enforcement agencies have been 
enthusiastic; several states have created state police training commis¬ 
sions for the express purpose of allowing Project Transition servicemen 
to qualify for service immediately upon discharge. At the same time, 
there are complaints that other "Federal agencies are dragging their 
feet and don f t want to bend their procedures unless they have to."^ 2 

No one knows much about training poor achievers. In particular, 
most private firms have no capability for teaching slow learners or 
those who have trouble learning in traditional ways, and moreover, have 
little reason to acquire one. This difficulty becomes critical when 
one considers the conjunction of Project 100,000 type enrollees with 


^Bernard Udis, "Notes on an Interview with the Deputy Director 
of Project Transition," June 17, 1969, p. 5. 


537 







ACDA/E-156 


• 

Project Transition. When Project 100,000 people are ready for dis¬ 
charge (as they will inevitably be due to re-enlistment requirements) 
private industry will in all probability not be ready for them. The 
only group with SOPs, however ineffectual, for dealing with this group 
is the MTDA. But if they are trained through an MTDA program, one of 
the organizationally most admirable features of the program is lost. 
With private industry as both trainer and employer there is no organi¬ 
zational gap between training and hiring. If the MTDA trains, the 
dischargees sust go through a third organization (the Service, the MTDA 
program and a placement agency) before they are actually in a job. 

There is another set of routines that must be made compatible. The 
candidate for providing the placement is the State Employment Service, 
a notoriously ineffectual organization. 

The Services receive none of the benefits of this training; in 
fact, if the program is vigorously implemented they lose the services 
of trained men for three months. Furthermore, to the extent that 
servicemen’s decisions to re-enlist depend on something like a rational 
calculation, the possibility of a guaranteed job upon discharge may 
swing the decision against re-enlistment. This aggravates the mili¬ 
tary’s serious personnel problem and increases training costs consid¬ 
erably. 


XIII.4 STRATEGIES FOR MINIMIZING ORGANIZATIONAL IMPEDIMENTS 

The above cases suggest that further questions must be asked in 
order to reduce the gap between alternatives and outcomes. Thus this 
section advances an approach which might be used to modify standard 
analyses with specific reference to the cases discussed above. 

But before discussing these strategies for minimizing organiza¬ 
tional impediments, several bald conclusions about both the context 
and prospects for shifting defense expenditures towards social objec¬ 
tives must be stated. Social projects, for example, Project 100,000 
or Project Transition, do not rank high in the operational priority of 
the military services. The Services do not have programs and SOPs for 
these activities. Nor are these activities central to the goals and 
norms of these organizations. 

The priority of social projects for the military will rise neither 
naturally nor rapidly. 

The ability of any civilian authority, including the Office of 
the Secretary of Defense, to influence these priorities is quite 
limited. 


538 


ACDA/E-156 


Expectations and programs to the contrary are destined to be dis¬ 
appointed. 

While these assertions might seem to suggest that analysts inter¬ 
ested in using the Services to achieve social objectives are doomed to 
failure, this conclusion is not warranted. To recognize the limits and 
constraints is not to argue that nothing can be done. Indeed, it may 
be helpful to abstract from some of the present, perhaps overwhelming, 
organizational and political constraints to consider the kind of alter¬ 
natives that might hypothetically be open to the Office of the Secretaxy 
of Defense. 

One must consider what a project requires of an existing organi¬ 
zation. In particular does it require that an organization: 

1. carry on, or carry on with more of the same (e.g., experimen¬ 
tation in vocational education). 

2. carry on, but as part of a new team of organizations or in a 
new environment (e.g., helicopter rescue service). 

3. initiate a new activity, i.e., one for which the organization 
does not have appropriate, in the sense of producing something like the 
desired outcome, SOPs and routines (e.g., experimentation in low-cost 
construction). 

4. carry out programs contrary to its existing goals and pur¬ 
poses (e.g., recruitment and induction of substandard men). 

By classifying analytic alternatives into these organizational 
categories, some general predictions can be made about the likely cor¬ 
respondence between objective and outcome in most programs. 

1. Telling an organization to do more of what it is doing 
already produces actual outcomes quite similar to intended outcomes. 

2. If an organization carries on in a new environment, gross 
outcomes will match expectations. However, an insensitivity to side 
gf£gcCs caused by inappropriate details of the routine will dramat 
ically increase the costs of the program. 

3. When an old organization is called upon to perform new tasks 
there is a high probability it will take one of two approaches: 

(1) choose from among old routines that one which looks most like the 
requested routine, or (2) if no old routine can plausibly be used, it 
is likely that the organization will do nothing. 


539 


ACDA/E-156 


4. Ceteris paribus , if an organization is given projects incom¬ 
patible with its goals, the outcomes will bear little, if any, resem¬ 
blance to the analytic choice. 

Many, if not most, of the exciting proposals for social service 
by the military fall into the final two categories, including Project 
100,003 and Project Transition. If the Secretary of Defense, or any 
civilian official, wants to achieve outcomes in these categories, then 
he must take one of two routes. 

1. Create a new organization to perform a new task. This is, by 
comparison, an attractive alternative. However, there are a set of 
questions that should be raised before taking this route: 

a. Is the task sufficiently understood that it could be 
efficiently executed by an organization? 

b. What are the ’’start up" and long-range costs attached to 
a new organization? 

c. Is it politically feasible to set up a competitor organi¬ 
zation; if so, at what price? 

d. How quickly can new routines be set up? 

e. What are the costs in terms of personnel, organizational 
glan and momentum? 

2. In the military area, the combined weight of tradition and 
politics may severely limit the power of the Secretary of Defense to 
create new and competing organizations, although in some unclaimed 
territories a new organization might function effectively. Therefore 
the Secretary of Defense must get effective social action out of the 
existing Services. This will be an extremely difficult task, one that 
does not allow simple formulas or standard prescriptions. Our sug¬ 
gested categories and strategies make no pretense of being exhaustive; 
they are merely suggestive of where help might be found. 


XIII.4.1 Types of strategies 

The general categories of control variables for a bureaucracy 
are: money, promotions, information and education, induced crisis, 
organizational programming. 


540 






ACDA/E-156 


Xm«4.1.1 Money The persuasive power of the purse is notorious. To 
the extent that the Office of the Secretary of Defense (OSD) controls 
the defense budget, it can effectively influence the actions of the 
Services. Its possible moves include: 

a) Tieing While explicit ties are not likely to be viable, to 
the extent that the OSD passes on questions of funds for items of cen— 
tral importance to the Services, especially items that may be marginal, 
OSD’s interest in other projects could have some effect. (Clearly, 
accountability is the key to making this a viable strategy.) 

b) Competitive spending—If the Secretary let it be known that 
when deciding certain classes of budgetary issues, the Services 1 sensi¬ 
tivity to social ramifications would be considered, it might be pos¬ 
sible to make productive use of inter-Service rivalry. For example, in 
considering Service requirements for additional hospitals, innovative 
design could be used as an important criterion. 


XIII.4.1.2 Promotion . At present, none of the Services furnish any 
career incentives to an officer with an interest in social projects. 

If individuals committed to these objectives had any influence over 
promotions, there are a number of strategies that could be used to good 
effect: 

a) Promotion requirements—The simplest is a new promotion 

requirement: to rise past the rank of colonel, an officer must have 

done a term of duty directing a public service program. 

b) Length of duty—The Army, for example, now rotates base com¬ 
manders every two years. Because social projects develop over a 
longer time span, judgment about an officer’s performance becomes 
extremely difficult. Lengthening his tour of duty could make him more 
accountable for, and presumably more responsive to, social projects. 

c) Speed of promotion—A distinguished Vietnam record is pres¬ 
ently required for speedy promotion. Similar rewards for distinguished 
social service would be equally effective. 


X II1.4.1.3 Information and education . Distribution of rewards to 
organizational members is the basic mechanism of control in organiza¬ 
tions. A secondary, but nevertheless important way of changing the 
behavior of organizational members is to change what influences their 
values. Among the potential strategies open to an interested party 
in OSD are the following: 


541 





ACDA/E-156 


a) Information—The creation of a flow of information into rele¬ 
vant organizational units about various social problems, e.g., manpower 
and health, and emphasis on what the Services are doing to contribute 
to the solution of such problems would gradually make men in relevant 
slots more conscious of these problems. 

b) Education—Material on social problems could be introduced 
into the curriculum of Service colleges, officers' programs, etc. 

Career officers could be sent back to universities to be trained in 
dealing with social problems. Special educational programs could be 
established within the Services. 


XIII.4.1.4 Precipitated crisis . Crises are frequent instigators of 
organizational change. Particularly with projects that require the 
Services to search for new SOPs, a crisis at the proper level (be it 
Pentagon brass, field commander, staff officer, or non-com) is an 
efficient strategy. The ability to precipitate crises depends to a 
considerable extent, of course, on control of money and promotions. 
For example, a Secretary of Defense might try to convince his chiefs 
that the post Vietnam spirit of the country would be highly anti¬ 
militaristic; thus to avoid a drastic cut in appropriations the 
Services would be well advised to make their arguments for funds on 
the basis of social service spillovers to the civilian sector (& la 
NASA). To move in this direction within the bounds of Congressional 
constraints, however, would not be easy. 


XIII.4.1,5 Organizational programming . Specifying the desired alter¬ 
native in complete detail, down to the lowest level SOP enhances the 
odds of organizational implementation. In a crisis situation, devel¬ 
oping and making new routines accessible to the Services may be 
enough. In the face of stiffer resistance, every new SOP may have to 
be an order. In either case, the point is the same. If expectations 
and realization are to match, "global" planning is out; minutiae are 
in. 


XIII.4.2 Examples of strategies 

These strategies should suggest the general considerations and 
possibilities for trying to turn an organization around. But one of 
the lessons of this framework is that not a great deal can usefully be 
said in such general terms. It is more informative to see such strat¬ 
egies "at work." 


542 






ACDA/E-156 


XIII.4.2.1 The Israeli Defense Forces 


The Israeli Defense Forces (IDF) have been in the social projects- 
manpower business since the early fifties. Most of the task of assimi¬ 
lating and educating Oriental Jews (who differ from European Jews 
markedly) has been entrusted to the I.D.F. While there is not a great 
deal of information available about the workings and outcomes of the 
process, a careful look at the existing data suggests the potential 
payoffs of the military serving non-military functions. In addition, 
the information indicates some measures for realizing this role of the 
military. 

1) Coverage. Only individuals who ’’combine lack of education, a 
low intelligence standard and a lack of knowledge of Hebrew in such a 
severe degree that enlistment in the army becomes impossible without 
educational preparation, and where there is no possibility of the^ol- 
dier’s being integrated in the military service” are not drafted. 

2) Educational output. About 37% of Oriental Jews have not com¬ 
pleted primary school. By time of discharge, 26 months later, 95% of 
this gjoup have met national standards for a primary school certifi¬ 
cate. Oriental Jews with more than a primary certificate who take a 
year of military "prepping” to prepare themselves for the universij^ 
have a graduation of 90% compared with 5% for other Oriental Jews. 

3) Educational outputs. Three months of vocational training are 
required by the I.D.F. Although we have no statistics on the type of 
training, there is some impressionistic evidence for the transfer- 
ability of this training to civilian life. 

4) Attitudes. One measure of the benefits of military service 
is public attitudes about military service. A poll taken under the 
auspices of Hebrew University included the question, ”If military 
service were not compulsory, would you sejrge?” 70% answered yes, 20% 
were undecided, and only 10% answered no. In addition, there is 
statistical evidence that the performance of soldiers with records of 
misdemeanors does not differ from that of a control group, suggestive 
of a willingness to go along with the institution. 


^Colonel Mordecki Bar-On, Educational Processes in the Israeli 
Defense Forces (Tel-Aviv: Israeli~Tress, Ltd., December, 1968), p. 23. 


44 

Ibid.. 

P- 

17. 

45 Ibid.. 

p. 

43. 

46 , . , 
Ibid. % 

P- 

11. 


543 









ACDA/E-156 


5) Recognition. The State of Israel gave national recognition 
to the contributions of the I.D.F. when it awarded the Israeli Educa¬ 
tion Prize for 1965, the highest national distinction, to the I.D.F. 

There are, of course, factors unique to Israel that make the 
I.D.F. an unusually effective educational tool. The sense of fighting 
for "the temples of our gods and the land of our fathers" creates a 
positive attitude toward the military that is uncharacteristic of many 
advanced nations in the 1960 f s. The intellectual heritage of the 
European Jew—a deep respect for education, socialist-labor traditions 
that call for equality—have shaped the atmosphere in which the I.D.F. 
educates as well as the educators themselves. The ratio of European to 
non-European Jews, expected to sink below one by 1980 makes assimila¬ 
tion and education of Oriental Jews a top priority item. Finally, as a 
less-developed nation, Israel can productively use the less sophisti¬ 
cated skills which can be taught in the comparatively short period of 
three months. 

These factors are for the most part difficult to reproduce. 

Without a detailed study of the workings of the I.D.F. program, other 
elements in its success must remain a matter for speculation. However, 
the specifics of the operation which are known illustrate how organiza¬ 
tional strategies look in use. 

a. Promotion within the junior command ranks is, to some extent, 
based on increases in, rather than absolute level of, educational 
attainment while in the I.D.F. This procedure creates incentive for 
taking advantage of in-service educational programs. To provide incen¬ 
tives for beginning the process, the job of squad commander, lowest of 
the command positions, requires only a comparatively low level of tech¬ 
nical sophistication. Thus, short term payoffs from performing well in 
basic training and elementary Hebrew are easily realized. In addition, 
there is a "chief education officer" with a small staff of his own who is 
responsible for all "leadership training." This provides an established 
career track for officers interested specifically in education. 

b. Information and education. There is a regular rotation of 
lower officers so that all officers at some point in their careers are 
presented with the problems of education, and hopefully internalize 
them. 


c. Organizational programming. The present methods for bringing 
the soldier up to a primary education level—nine hours of class per 
day in classes of ten, led by two teachers during the last three months 
of service—are the end product of a long series of experiments. 
Originally, this instruction was put at the beginning of service so 


544 



ACDA/E-156 


that the I.D.F. would reap some of the benefits. A series of experi¬ 
ments showed that instruction at the end of service was much more 
effective. Not only were the enrollees* payoffs closer, but a success¬ 
ful term of service increased the enrollees* tolerance for uncertainty 
and reduced their fear of failure. Thus by specifying and experi¬ 
menting with procedures for operation, the I.D.F. has developed an 
effective educational program. 

In addition, due to the large influx of immigrants, funds have 
been provided to develop efficient methods of teaching Hebrew. This 
experimentation with techniques and procedures has contributed to the 
success of the I.D.F. in the educational sphere. 

While these "strategic 15 features of the I.D.F. project by no 
means explain its success, they do illustrate how, with a sufficient 
commitment to education, the control variables—promotion, information, 
education and organizational programming—-can be used. 


XIII.4.2.2 Project Transition 

The earlier predictions abou^the likely outcomes of Project 
Transition were far from sanguine. ‘ If the Secretary of Defense were 
very interested in the program, what should he do? According to a con¬ 
ventional account, correctives include earlier and wider dissemination 
of information, more adequate counseling, wider coverage, etc. While 
not taking issue with any of those needs, the organizational framework 
suggests a different type of thinking about solutions. It identifies 
the base commander as key and suggests that his priorities will not 
move him to push Project Transition, particularly in a difficult area, 
e.g., getting someone to train his less able men, and may lead him to 
actively oppose it for his more able soldiers. Thus, in organizational 
terms the problem is one of moving the base commander. While an effec¬ 
tive set of strategies depends on detailed information about the job of 


47 

This is not to fault the basic strategy of Project Transition 
which was to make the task assigned to the Services as simple’ as pos¬ 
sible. In organizational terms, the idea of requiring the Services 
only to free the time of its men for training by others, rather than 
trying to get the Services to do it themselves, is excellent. Only the 
minutiae are missing. 

^Udis, "Notes," p. 3. 


545 





ACDA/E-156 


base commander, a number of strategies can be suggested on the basis of 
public information. 

1) Promotion. At the moment, promotion is rather firmly in 
military hands, so there is not a great deal the Secretary of Defense 
can do directly. However, there are small things that might help a 
little. If Project Transition were made a standard feature of high 
level inspection tours, it might be perceived as more important by the 
base commander. 

2) Money. How many "marginal" projects does a commander have 
that OSD support could influence? Money for new facilities—housing 
for his men, a new officers 1 club—could be an understood reward for 
faithful performance in Project Transition. 

3) Information and Education. How well-informed is the Assis¬ 
tant Secretary of Manpower on the progress of Transition? An informa¬ 
tion system that collected and transmitted, on a monthly basis, 
information of who was in what training program ^d where would create 
a sense of being watched for the base commander. Providing him with 
the same information would allow him to measure his performance 
against an organizational norm. 

4) Crisis. In this case the appropriate level for crisis is 
clearly the base commander. One possible crisis might involve a 
threat to military autonomy. If the base commander does not promote 
Transition, civilians could be involved on each base, with some influ¬ 
ence over a serviceman’s off-duty time. The implied threat to the 
integrity of the military organization might be strong enough to 
generate considerable interest in Transition. 

A more circuitous route involves dictating that the Services 
lower reenlistment requirements so that each commander faces the pros¬ 
pect of having low quality men for another hitch if not a lifetime. 

His enthusiasm for increasing the range and attractiveness of civilian 
options open to lower-scoring men could increase markedly if the 
alternative was to downgrade the quality of his Service. 


49 


Some of this is currently being done. 


546 



ACDA/E-156 


SOCIETAL TURNABILITY: A THEORETICAL TREATMENT 1 

Amitai Etzioni 


XIV.1 INTRODUCTION 

The time between a ship’s docking and its departure, after unloading, 
cleaning, and reloading to undertake a new mission, is an indicator of 
its turnability. So are the costs which have been incurred in the pro¬ 
cess. Turnability of ships is affected by the quality of the services of 
the harbor, the efficiency of the crew, the ship’s design, and the nature 
of its former missions as compared to its new ones.^ In this paper the 
concept of turnability is applied to modern societies, which have exten¬ 
sive guidance mechanisms to direct their efforts. We seek to explore 
the conditions under which nations committed to one course, can as 
swiftly and economically as possible, release the resources and manpower 
involved and commit them to new missions. 

We refer to turnability, rather than change of direction to indi¬ 
cate that we deal with instances in which the change in missions is 
relatively sudden, encompassing, and swift. That is, we do not deal 
here with incrementation but with relatively fundamental changes—of 
the kind involved in terminating or phasing out a war within 12 to 24 
months or so. That is, we are interested here in the problems in¬ 
volved in shifting ten or more billions of dollars by changing national 
priorities, rather than a marginal modification in budget or national 
attention. 

It is of course very difficult, if not impossible, to state pre¬ 
cisely at what level relatively small changes turn into ?, big” ones. 


This report was prepared under the auspices of the Center for 
Policy Research. The author is indebted to Andrew Barlow, Roberto 
Kleinfeld, Richard Kemp and Mary Helen Shortridge for research assis¬ 
tance. I am indebted for comments on a previous draft, to Emile Benoit, 
Kenneth E. Boulding, Julius Margolis, Richard R. Nelson, Bernard Udis 
and Adam Yarmolinsky. 

2 0n this concept and the kinds of costs involved see United 
Nations, Trade and Development Board, Conference on Trade and Develop¬ 
ment, Shipping And The World Economy (TD/BC.4/17), Geneva, 1966, p. 26. 


547 


/ 





ACDA/E-156 


There is probably a border line area. But changes of $0.5 to $2 
billion a year are relatively common and routine; changes of $8 to $12 
billion or more, a year, especially for two or three years in a row and 
in the same direction, are very rare and "fundamental n in their conse¬ 
quences. Of course, the base must be taken into account; changes of 5% 
or less a year are relatively small, 20% or more tend to be "fundamental." 

We emphasize this point not only because we believe such major 
shifts of efforts are necessary for national welfare and security, but 
because the operations involved in fundamental shifts are different 
from operations which smaller shifts entail. Thus, we are not concerned 
with such minor operations as adding a few new job training courses for 
enlisted men about to be discharged, although we are in favor of such 
additions, but with measures required to allow hundreds of thousands of 
men, and whole industrial complexes, to "turn around" in short periods 
of. time. 

We use the term "turn-around" rather than "conversion" because 
conversion implies that the carrier must be reconstructed, an assump¬ 
tion we wish to explicitly explore and not implicitly make by our choice 
of terminology. At least logically it is possible, fastest, and least 
costly to turn men and facilities now in military service to civilian 
purposes without altering them (e.g., military transportation systems 
like Military Air Transport Service). Theoretically, it is even 
possible to turn around, say, a system of military technical schools 
to civilian missions, without changing either the school system itself 
or those in control. Conversion is only one form of turnability, and 
while conversion is often entailed, it is not a necessary concomitant 
of turning around. Below we consider whether turning around with little 
or no conversion makes turnability most effective. 

Nations as a rule find it difficult—in economic, political and 
psychological terms—to turn around, so difficult that it frequently 
seems that they cannot turn around at all (cases in point are the United 
States 1 commitment to farm subsidies, veterans 1 benefits, etc.); or can 
only turn around following a major crisis such as defeat in a major war 
and/or a change in the top level leadership. Such changes, involving 
the top leader and the party in office preceded the termination of the 
Depression, the French war in Algeria, the war in Korea, and it seems 
the war in Vietnam. We thus ask, under what conditions can the maneu¬ 
ver which is usually very difficult to accomplish (and hence, typically 
carried out only when it is overdue, and in an excessively slow, ex¬ 
pensive and incomplete manner) be conducted more effectively? The 
image which stands before us as we explore the statecraft of modem 
nations is that of ships being turned in the harbor of a very under¬ 
developed country. 


548 



ACDA/E-156 


The conditions under which turnability may be enhanced seem 
different various policies and for various modern nations. For 
example, a shift of five billion dollars from NASA to HEW, entails 
different adaptive measures from let us say a shift from HEW to the 
National Foundation on the Arts and the Humanities. We focus here on 
one kind of shift, that of the war machinery, for one nation—the United 
States, under one set of historical conditions, namely the near future. 
More specifically, we explore the factors which may enhance the shift 
to domestic missions, once the war is being terminated, of those 
resources now invested in the Vietnamese war and in the maintenance and 
development of a strategic weapon system. Such a turn-around will be 
affected by many factors studied by others who work on the same project 
we do; we limit our exploration to key structural organizational factors. 

Our approach is theoretical in the sense that we seek to specify 
the variables involved and explore their relationships. As the limited 
examples of turn-arounds of modern war machinery (and limitation of our 
research budget) do not allow us to collect data on the many variables 
involved, the material provided below is strictly illustrative. 

Turnability is one instance of a category of processes we classify 
as societal guidance.^ The two main components of societal guidance are 
consensus-building , to gain support for the new course of action, in this 
case, civilianization, and control —the development of the tools neces¬ 
sary to implement the policy which is being introduced and to phase out 
the obsolescent one, in the case at hand, the high commitment to military 
missions. We explore first the role of consensus-building in enhancing 
the capacity of the United States to focus significantly more of its 
efforts on domestic missions; we next turn to the constraints on the 
implementation of such a policy resulting from the limitations of 
existing control structures. We close with a discussion of the rela¬ 
tive effectiveness of four administrative options for the transition 
(the turnability ladder) in view of making the transition more 
effective. 


XIV.2 THE ROLE OF CONSENSUS-BUILDING 

XIV.2.1 Constraints: Democratic or Generic 

Generally, we have already noted, the capacity of the societal pro¬ 
cesses required to bring about turn-around seems to be rather low. 


3 Amitai Etzioni, The Active Society (New York; Free Press, 1968), 
Chapter 5. 


549 









ACDA/E-156 


There are, though, two major competing propositions as to the core 
structural reason for this difficulty in introducing fundamental changes 
of direction. According to one school of thought, the difficulties are 
not universal to all modern societies but only endemic to democracies. 
Democracies are said to prefer to slowly reduce commitments to an 
obsolescent course, meanwhile adding new ones when internal pressures 
or external changes so require, over large-scale shifting of resources 
from one mission to another.4 

The concentration of power over policy in the Soviet Union means 
that its leaders are more frequently able to make clear-cut choices 
among major alternatives than American political leaders, whose 
choices are almost invariably marginal or ambiguous. The Soviet 
Leadership is also better able to coordinate policies in various 
areas, and, because of the greater scarcity of resources, the need 
for such coordination is far greater in the Soviet Union than in 
the United States. The concentration of the responsibility for 
initiating policy in the top leadership means that the Soviet 
system may be slow in responding to gradually developing policy 
problems. In the American system the agitation of the affected 
groups is likely to bring the problem to the attention of the top 
leadership more quickly. Once the problem is recognized by the 
Soviet leaders, however, their concentrated power enables them, if 
they wish, to deal with it vigorously and to reverse, if necessary, 
earlier policies. Policy innovations invariably are slow in the 
United States.^ 

Application of the general proposition just reviewed to the issue 
at hand suggests (a) that the system will not generate internally a 


Ernest W. Lefever, of the Brookings Institution, wrote to the 
Washington Post on August 5, 1969: ”No member of the House or Senate 
is ever confronted with a clear option to authorize $10 million for 
education or defense, highways or space. Each program, domestic or 
foreign, is presented on its own merits, not as an alternative for other 
unrelated programs. The Congressman, keeping in mind his own priorities 
and responsive to his constituents, votes for the measure as presented, 
against it, or seeks a modification. He never presents an amendment 
calling for a transfer of $10 million to an unrelated program.” 

^Zbigniew Brzezinski and Samuel P. Huntington, Political Power: 
USA/USSR (New York: Viking Press, 1963), p. 413. 


550 






ACDA/E-156 


major reduction in expenditures on military purposes and release the 
resources to other use on short order, let us say within a year or two, 
from the beginning of the shift; (b) that if opportunities arise for 
major reductions in military expenditures due to events such as termin¬ 
ation of the war in Vietnam or strategic arms limitations agreed upon 
with the Soviet Union, the resources released will not be primarily 
turned over to domestic missions but divided among three major uses— 
other military needs, increased private consumption (via lower taxes 
or reduction of the national debt) and domestic missions.6 At the 
present time, we see moves toward tax-reduction, which release re¬ 
sources to private use, and claims being staked by the military for 
funds which will be released for such uses as replenishing stockpiles 
diminished during the war in Vietnam and developing new strategic 
weapons.7 The proposition would further imply that new resources 
generated by the growing economy of the nation are expected to be 
directed in a fashion similar to those released by peace in Vietnam and 
arms reduction rather than focused on the domestic front. 

The alternative proposition is not that it is easy for democracies 
to turn around—we are unaware of anyone who subscribes to this view. 
Rather, the competing proposition is that all political systems have not 
yet developed the kind of guidance mechanisms (consensus-building 
included) which allow them, in the face of a rapid change in the environ¬ 
ment or internal needs, to swiftly alter their priorities in terms of 
major commitments of funds, manpower, and psychic energy. 

Even more significant than establishing which system is more 
transferrable and at what costs, is the question of which specific 
factors, within each system, account for its particular turnability. 

This is of special interest to us as we seek the steps which may in¬ 
crease this society 1 s turnability, if not permanently, at least for our 
post-Vietnam war transition from war and space-oriented priorities to 
major domes tic effo rts. 

^For relevant statements of spokesmen of the Administration, see 
discussions of the size of the peace dividend by Daniel P. Moynihan, 
Herbert Stein and Arthur Burns, as reported by the New York Times , 
respectively on August 26, 1969, August 28, 1969 and September 3, 1969. 
See also Edwin L. Dale, Jr., "After Peace Breaks Out, What Will We Do 
With All That Extra Money?" New York Times Magazine, February 16, 1969, 

pp. 32 ff. 

7 For a discussion of the background, see Charles L. Schultze, 

"Budget Alternatives after Vietnam," Agenda for the Nation (Washington: 
The Brookings Institution, 1968), pp. 13-48. William Beecher reports 
"Military Asking for $20 Billion More," New York Times , December 19, 

1968, and Edwin L. Dale, Jr., "A Pentagon Aide Bars Major Reductions in 
Budget after War," New Y ork Times , June 7, 1969. 


551 









ACDA/E-156 


Many of those who hold that democracies turn as slowly as tugboats 
while tyrannies are torpedo-boat swift (a theory particularly popular 
in the thirties as Nazi Germany mobilized swiftly while France and 
Britain faltered) view constraints on the capacity to turn around as 
sample indications of the poor quality of the system. One of the major 
constraining forces is the need to build consensus for the new course; 
if turning around more swiftly further requires going beyond that which, 
at the particular stage, the large majority views as legitimate, then 
obviously the constraint on turnability is at one and the same time a 
safeguard of the democratic process, and the ’'costs' 1 generated by 
delaying, must be tallied against the values invested in such a system. 
Tyrannies, in contrast, it is said, can turn on, off, and on again 
quickly, and turn around as sharply as Krushchev did in Cuba in 1962, 
with little concern about citizens T reaction to the loss of national 
prestige entailed by the involuntary change of direction. 

The opposing school of thought points out that, to stay with the 
example, Krushchev did not remain long in power after the Cuban crisis 
and though other factors also contributed to his unseating, his Cuban 
debacle was a major one. More generally, it is suggested, societies 
whose polities function differently from ours must also worry about the 
respect of their citizens and a sense of legitimacy, and hence cannot 
turn around much more readily than democracies, although they may be 
able to do so somewhat more rapidly. 8 For each type of polity, it may 
be asked, given its specific nature, what could be done to increase 
its capacity to change course fundamentally and swiftly, without 
tipping it in the process? The answer, we shall see, lies in part not 
in the steering mechanism but in the processes which are being guided. 

XIV.2.2 Mobilization for Change 

While the government does constitute the guidance overlayer of 
the society, the overlayer is deeply affected by the dynamics of the 
societal underlayer. The many and varied facets of articulations 
include values which the staff of the guidance centers (the elites) 
share with major segments of the membership of the society (e.g. patrio¬ 
tism, conservatism), and shared cognitive maps and expressive memories 
(such as implied in the symbols of "Munich" and "Pearl Harbor"). How¬ 
ever, the single most important link, and the one which explains most 
why guidance mechanisms find it difficult to reorient the societal 
processes they are to guide, even when they see the storm ahead quite 


For studies on rigidities in totalitarian countries see Burton 
Klein, Germany's Economic Preparations for War (Cambridge: Harvard 
University Press, 1959) and Robert Butow, Japan's Decision to Surrender 
(Stanford: Stanford University Press, 1959). 


552 







ACDA/E-156 


clearly, is that they cannot readily change "their" interest group 
moorings. The views from the captain 1 s tower and from the top decks 
are closely related but not identical and the captain tends to feel 
that he must satisfy his first class customers, first.9 

ihus, although we do not hold the pessimistic view of societal 
guidance and do see a capacity for fundamental reorientation—we also do 
not share the rationalist view, which sees a great capacity for easy 
planning and implementation. This view is largely discredited as a 
general theory of human nature but still subscribed to in practice by 
many government officials and theoreticians, as they imply when they 
evaluate organizational reforms without exploring the underlying 
societal anchors and the conditions under which they may be lifted. We 
thus chart a middle course between the optimists and the pessimists in 
our view that fundamental decisions to turn around and change the organi¬ 
zational structure accordingly can be made, but chiefly only after—or 
during—broad mobilization of support of private or public pressure 
groups and the public at large. One of the major reasons many domestic 
programs in the United States, for instance, desegregation of schools 
and eradication of poverty, have proceeded so slowly, is that their 
initiation and extension was not accompanied by a mobilization of 
consensus. (Even when there was such mobilization in reference to ulti¬ 
mate goals, and to social justice, it did not cover the means used, 
e.g., "busing" of children). Even now, the idea that all or most of the 
so-called "peace dividend" will be turned over to domestic missions is 
not widely supported. It is one of our central propositions that unless 
a broader base is built, the desired turn will not be accomplished. 
Recently such support was being mobilized. By the end of August 1969, 

52% of the public came to regard military spending as too high, follow¬ 
ing a barrage of criticism of military expenditures in the U.S. Seriate 
and the press. Only 8% thought military expenditures should be in¬ 
creased. In 1960, the respective figures were 18% and 21% (the balance 
either thought the amount proper or had no opinion). 10 Whether public 
support for reduction of military expenditure continues to rise or the 
August 1969 figures show a temporary arousal which will soon subside, 
depends in part on the action of the national leadership in Congress, 
the White House, and the press, in part on the educational efforts of 


9 

A question has been raised as to whether we imply the system is 
really guidable at all, or—if so, is it only for the upper classes? Our 
position is that it is inadequately guidable for all, but comparatively, 
significantly more responsive to the upper classes. All members of 
society, though, suffer as changes in the environment (or internal 
changes) require swift and encompassing action. 

“^Time, Vol. 94, No. 9 (August 29, 1969), p. 13. 


553 




ACDA/E-156 


the opposition.il 

Before we can further explicate the preceding proposition, we must 
digress to depict the kind of society we see before us. We view America 
as neither tightly controlled as the power-elite conception implies, nor 
as free-for-all as the liberal conception of pluralism suggests. The 
country is not run by any one elite or class. Numerous groupings have a 
leverage on the central societal processes, and their interests are 
usually not highly coordinated and often are in partial conflict. Big 
business and small business, big business and the Administration, the Air 
Force and the State Department—all these do not act like the members of 
a well-drilled football team. Civic groups (e.g., the League of Women 
Voters), religious associations (e.g., the National Council of Churches) 
and universities (e.g., on NSF Board)—sometimes referred to as public 
interest groups—have some autonomous bases of power .^ While the 
ownership of the mass media is concentrated, the range of viewpoints 
expressed is much broader than the patterns of ownership would lead one 
to expect. The supporters of, let us say, Goldwater and Rockefeller 
have conflicted quite sharply on the air and in newsprint, and while 
Senator Eugene McCarthy did not gain "equal time" to answer President 
Johnson’s charges on television, he was extended much more time than 
any theory of monopolization-of-the-media explains. Despite all the 
talk about the manipulated American citizen, a high percentage of 
Americans favor world disarmament and a stronger United Nations (about 
70%); the enacting of gun controls opposed by the industry (73%); and 
more government efforts to revitalize city ghettos (57% in November 
1967, after the riots). While more than a third of the citizens are 
ill-informed and frequently do not vote, another sizeable segment— 
referred to as the "attentive publics" by political scientist Gabriel 
A. Almond 1,3 —follows events closely and responds actively in political 
terms, by perhaps re-channeling their votes, campaign contributions, 
and voluntary labor. They are not controlled by whoever is in power. 


Another major difference between the American polity as we see it, 
and the power-elite image is our recognition of a plurality of interest 
groups whose consensus must be won and sustained by anyone who seeks to 


^ "For a study showing the effects of moving, first, without building 
consensus, and again, after its formation, see Morton Inger, Politics and 
Reality in an American City (New York: Center for Urban Education, 1969). 

12 

The subject has been recently treated effectively by Grant 
McConnell, Private Power and American Democracy (New York: A, Knopf, 
1966). For our own view, see The Active Society , Chaps. 16-18. 

13 

The American People and Foreign Policy (New York: Harcourt, Brace 
and Co., 1950), p. 139. 


554 










ACDA/E-156 


launch a major new program in the United States. The voters-at-large 
do play a real role; they must be counted as one more, rather impressive 
public interest-group. That is, launching cf new programs usually 
requires some genuine efforts at mobilization of public opinion support, 
as well as that of a conglomerate of interest groups. 

On the other hand, one main reason why the system is not nearly as 
pluralistic as the liberals believe is that the contesting interest 
groups differ largely in their power. Small business and big business 
both have a say, but big business 1 say on national matters seems con¬ 
siderably greater, although this remains to be documented. Business and 
labor unions both exert pressure, but that of the unions cannot counter¬ 
vail that of business, when the latter acts in unison. The A.M.A. 
carried more weight than nurses ? associations, and so forth. Political 
give and take among the various groups hence does not yield the neat 
compromise which serves as many needs of as many groups as possible 
(the political equivalent of the greatest happiness of the greatest 
number), bul: is tailored to the existing power -differential . No interest 
group is ignored; but some are heeded less than others. 

Second, important segments of the citizenry are more or less locked 
out of the political process. Weak groups—such as the poor, lower- 
class ethnic minorities, and farm hands—are not only underprivileged, 
but also have little political say-so. This is because they are under¬ 
organized and hence cannot mobilize whatever latent power they do have. 
To the extent that these groups have been mobilized over the past 
decade, or—because of social disorders in which they were involved— 
the system has made some concessions to their much neglected needs, thus 
showing that the American power elites can neither keep the under¬ 
privileged from mobilizing (although they can slow down the process 
considerably) nor can they refrain from bargaining with them once they 
are politically active. 

In our semi-pluralistic system alliances are important. As the 
Negro groups of the civil rights movement reacted to the slow pace of 
1964-1965 reforms (then at their "peak”) by growing more internally 
divided and externally militant, thus alienating many white liberals, 
the political conformation lost the liberal versus conservative line and 
acquired a Negro versus white coloration, although some lingering of 
white liberal support remained. As these sentiments were registered in 
the 1966 Congressional elections and later in public opinion polls,14 
14 

According to the American Institute of Public Opinion, only a 
third of the American people (34%) felt in March 1965 that the Johnson 
Administration was "pushing" integration too fast. By December 1966 
they numbered more than half of the population (53%). Those who felt 
that integration was progressing "not fast enough" numbered only 9% at 
the later date, a sharp decline from 17% in March 1965. 


555 




ACDA/E-156 


the political bases for "concessions* 1 to the Negro (and, to some extent, 
other poor) were undermined. The social reforms involved—slum clearance, 
anti-poverty programs and Aid for Dependent Children—also lost ground, 
while others such as social security and medicine—which also serve the 
middle classes—continued at the slow pace that the liberal-conservative 
compromise and the Vietnam war exigencies tolerated. The public*s views 
seemed to be close to those of the political leaders: when a national 
sample of Americans was asked which programs to cut first, anti-poverty 
and welfare were listed five times more often than medicaid and ten 
times more than Federal aid to education (Harris Poll, January 29, 1968). 

The picture of changing coalitions and public sentiments outlined 
above does not reflect a concentrated capacity of one elite to regularly 
push through its program in the face of opposition by other power groups, 
or to manufacture consensus at will, making the "masses" see in its 
monopolization of power and privilege the best of all worlds ("The 
American Way of Life," "peoples 1 capitalism") or a legitimate policy. On 
the other hand, the relations between those who favor reforms and those 
opposed are not like the bargaining between two roughly equal groupings, 
let us say, as between a powerful union (like the UAW) and the well- 
organized automotive industry. Rather, in some matters they are like 
dealings between an oil company and gasoline pump owners, or between the 
International Ladies T Garment Workers Union and a small "shop" owner. 

The very weak groupings (e.g., farm hands) gain few concessions and then 
for the most part when they are in coalition with others (e.g., with 
associations of Mexican-Americans or the AFL-CIO); the more powerful 
labor groups such as white organized workers attain, albeit slowly, 
several reforms they desire (e.g. in the health area) and not insignifi¬ 
cant pay-offs (in the form of a higher standard of living); still a more 
highly disproportionate part of the total privileges are concentrated 
in the hands of a few powerful groupings who vie with each other over 
their distribution. 

This picture of the American polity leaves open three questions 
which we cannot explore here: how large are the gaps among the have- 
nots, have-somes, and have-mosts? Are they shrinking or expanding? 

And under what conditions can these gaps be substantially reduced? But 
whatever the answers to these questions, two features stand out—power 
is dispersed to a considerable extent (including, we must repeat, among 
the various power "elites") and in order to advance new programs suc¬ 
cessfully, coalitions must be formed and consensus built. 

For the issue at hand, we find that, on the one side, some of the 
most powerful private interest groups are basically not interested in 
shifting from a greater mobilization for war and national security to 


556 



ACDA/E-156 


greater mobilization for domestic missions. (This set of groups is 
sometimes referred to, rather loosely and without recognition of the 
internal divisions and lack of tight coordination, as the industrial 
component of the military-industrial complex.) If this were the whole 
or even nearly complete picture, there could hardly be a rapid turn¬ 
around from intensive national mobilization for war and security to a 
similar mobilization for domestic missions. To put it in the most 
elementary terms, if the view of America which sees its war machinery 
as being run to provide easy and sure profits for its industrialist 
class were even nearly accurate, a major turn-around from military to 
c ^ v Hi- an programs, short of a revolution, would not be possible. 

The very fact that such a turn-around, and a rather sharp one, 
took place in 1945-1946 suggests that this is simply not a true picture 
°f the United States. The number of military personnel on active duty 
in 1945 was 12,123,455. It had dropped 75% a year later, to 3,030,088, 
and had decreased another 12% from the 1945 level by 1947 (to 
1 > 561 , 000 ).the same period military expenditure dropped from 
$83,309 million to $43,207 million (1946) and to $14,372 million 
(1947). 16 

Even now more than half a million persons are discharged each year 
and somehow absorbed into the civilian economy without special efforts 
to ease the transition being made. In recent years the number has been 
even higher: 830,000 in 1968. The projection for 1969 is 840,000, and 
for 1970—970,000. 17 


U.S. Bureau of the Census, Statistical Abstract of the United 
States 1968 (Washington: Government Printing Office, 1968) p. 257 and 
the same publication for 1957, p= 247. 

~ ^Ibid. , 1957, p. 238 and 1968, p. 296. For a detailed discussion 
of the extent of mobilization during the war see Report of the Chairman, 
War Production Board, Wartime Production Achievements released by the 
White House, October 9, 1945. On preparations for the transition and its 
initiation, see John C. Sparrow, History of Personnel Demobilization in 
the United States Army (Washington: Department of the Army, Office of the 
Chief of Military History, 1951); A.D.H. Kaplan, The Liquidation of War 
Production (Washington: Committee for Economic Development, 1944) and 
Bernard M. Baruch, and John M. Hancock, Report on War and Post-War 
Adjustment Policies (Washington: U.S. Office of War Mobilization, Feb¬ 
ruary, 1944). 

■^U.S. Department of Labor, Transferring Military Experience to 
Civilian Jobs: A Study of Selected Air Force Veterans , Manpower/Auto¬ 
mation Research, Monograph No. 8 (Washington: Government Printing Office, 
1968). 


557 















ACDA/E-156 


Of course one must take into account the special conditions that 
prevailed in 1945; for instance the pent-up consumer demand which accu¬ 
mulated in the war years. But the fact remains that within the confines 
of the capitalist system, such a turn-around was accomplished. The main 
lesson which follows is that "special conditons" may again have to be 
created. It might even be said that this time it will be more: difficult 
to turn around, but one cannot conclude that such a turn cannot be 
brought about within the confines of the system. 

A major reason it is possible, at least in principle, to reduce arms 
rapidly is that the industrialist interest groups are divided against 
each other, in at least the following ways: (a) those groups which bene¬ 
fit from military contracts compete with each other, (b) those interest 
groups which benefit from military contracts compete with the larger num¬ 
ber of industries which do not, and which constitute at least a potential 
pressure group for conversion (so far their pressure has mainly taken 
the form of demands that government spending be kept down, which—in the 
context of mounting domestic demands—led to some trimming of military 
expenditures, and, more substantially, prevented them from rising even 
more), and (c) those interest groups which benefit from military con¬ 
tracts often have a higher profit margin and/or safer and simpler markets 
in their deals with other sectors of the economy and hence have an inter¬ 
est in diversification and, at least potentially, in turning to domestic 
missions. 

Second, there are many other interest groups whose interests are in 
conflict with those of industrialists, including teacher associations, 
social workers, nurses—all interest groups which can expect to gain from 
conversion. 

Third, there are the public interest groups, ranging from Americans 
for Democratic Action to the National Council of Churches, who do not pro 
promote their self-interest in this context but the national interest and 
who mobilize the public on these issues, on balance, in favor of turning 
to domestic missions. 


Recently, it has been argued that defense business is less profi¬ 
table than other production. See, for instance, The New Republic , 

George E. Berkley, "The Myth of War Profiteering", Vol. 161, No. 25-26 
(Dec. 20, 1969) pp. 15-18. However, this does not take into account the 
lower risks such production entails, and most contractors frequently work 
with government-owned property, materials, and working capital. See 
Stanford Research Institute, The Industry-Government Aerospace Relation¬ 
ship , (Menlo Park, California: The Institute, 1963), Vol. II, pp. 118 ff 
Also, as one can see in the 1969 copper market, producers are willing to 
sell for a lower price, if they can have "safe" customers. 


558 







ACDA/E-156 


Fourth, the taxpayers i.e. the public-at-large—are interested in 
keeping taxes low, hence in keeping down the total level of government 
expenditures. When the justifications for military expenditure are weak¬ 
ening and there are urgent needs on other fronts, segments of the public 
tend to favor a shift of resources to domestic plans. The size of these 
segments would grow if the kind of efforts which are now being made to 
legitimate the war ceased and the energy used to legitimate higher com¬ 
mitments to domestic missions. ° 

It must, though, be recognized that the public-at-large is the 
least likely source of active support for this particular turn-around. 

The deeper reason the public-at-large is much more difficult to mobilize 
for domestic than for military or space programs is that those projects 
which involve national interests and prestige potentially "pay off" to 
all, or at least most citizens. At stake most commonly is national 
prestige. As a result of secularization and of nationalization, the 
state has become the prime frame of identification for most citizens. 

Hence they derive personal psychic satisfactions and frustrations from 
real and imaginary gains and losses of their nation. Thus, humiliating 
the nation (e.g. in the Bay of Pigs) will displease most Americans, 
while building up the nation's prestige (e.g., Apollo 11) will gratify 
most of them. 

Most domestic programs are allocative in nature in the sense that 
pleasing one group of Americans tends to displease another. Plans aimed 
to help labor, "offend" the industrialist; those which please the Blacks, 
offend many Southerners, and so on. While it is possible to negotiate 
this rift by either packaging reforms so that the total package will in¬ 
clude some pay-off for each major group, or at least gain majority sup¬ 
port, or will appeal to a moral value subscribed to by those not serviced, 
it is a. priori much more difficult to build consensus around most domes¬ 
tic plans than many foreign ones, especially war. 

In toto, we see not one monolith—holding a heavy hand on the socie¬ 
tal guidance mechanisms, pushing the wheel toward ever greater military 
spending while blocking turns toward a civilian course—but a large var¬ 
iety of hands, that differ in the directions in which they pull and the 
might with which they pull. At a particular point in time the profile of 
support of interest groups (private and public) and of the unorganized 


19 

'One reader commented that this statement is a "personal value- 
judgement." On retreading it, I let it stay, because I see no indica¬ 
tion of preference in it but only a statement, value free as far as I 
can tell, that if^ "A" were done, the consequences specified are likely 
to follow. (Of course there is nothing wrong with value-judgements as 
long as one subscribes to the right values.) 


559 





ACDA/E-I56 


public for a particular course may seem rigid and unchangeable, but over 
time new coalitions can be formed and new courses can be ''charted." 

We thus concur with those who see an intimate relationship between 
the course the government follows and the pressure of various interest 
groups, including public ones. But we do not see these groups as all 
pulling in one direction nor their net pull as necessarily opposed to the 
particular turn-around we study here. Under conditions which cannot be 
explored here, we do expect the net effect to be in the direction of a 
high domestic priority, if not a domestic top priority. This would be 
especially true if sizeable segments of the public-at-large were mobi¬ 
lized around domestic priorities, for instance pollution control. 

For any given level of consensus more or less turnability can be 
achieved, depending on the way the system is structured in terms of cy¬ 
bernetic overlay and organizational networks, i.e., how "rational" it 
can be. To this we turn next. 


XIV.3 CONTROL 


XIV.3.1. The Limits and Opportunities for Societal Guidance 

We move from the question—-can we mobilize the will to recommit? — 
to the second most important question underlying the study of turnability: 
can we find the tools to do so? This is, in effect, a question as to how 
much rationality societal systems are capable of in general, in our plu¬ 
ralistic society in particular, and in reference to the post-Vietnam 
increase of domestic programs, specifically. To put it differently, the 
question as to our ability to redirect is: can we set goals and gear 
our system to serve them, or are we so caught by our previous commitments 
and surrounding constraints that we cannot cut loose? The rationalist 
answer is affirmative, recognizing only ad hoc limitations on societal 
guidance; the incrementalist answer is that we can at best plan marginal 
modifications but not set overall patterns, and in that sense we can only 
move slowly away from adverse conditions.^ But, the incrementalist says, 
we cannot set goals, especially if they entail basic structural reorgani¬ 
zation. Our own position is an intermediate one; we see nothing even 
remotely approximating a capacity to plan and fundamentally restructure 
societal systems to order; but we see the conditions under which, if the 


For an example of a typical incrementalist viewpoint see Charles 
E. Lindblom, The Intelligence of Democracy (New York: Free Press, 1965). 
The rationalist viewpoint is represented by the many advocates of the 
"total planning" approach. 




560 








ACDA/E-156 


appropriate efforts are made, more than incremenation can be achieved. 
To guide to direct in a general sense, even to make occasionally fun¬ 
damental decisions—is less demanding than detailed planning, but pro¬ 
vides more than mere marginal modifications. The capacity to make such 
guiding decisions is explored next. 


XIV.3.2. Decision Making 

To effectively turn around requires a capacity to make fundamental 
decisions. Even if the actual turn-around is relatively slow and gradual, 
and the decision to change direction is implemented in a piecemeal manner, 
there must be a guiding line, a base-decision which the more limited 
decisions seek to specify. Without such a fundamental commitment, the 
efficacy of turn-around will be reduced. But incremental implementation 
is not necessarily a sign of lack of base-decision. Thus, the. termina¬ 
tion of the war in Vietnam may drag on for years, with a small proportion 
of the American troops there withdrawing every few months, but this still 
could reflect a prior policy decision. The monthly incremental decisions 
(e.g., how many units to withdraw this time) are not necessarily an indi¬ 
cator that there is no underlying policy decision. 

21 

When no such policy decision has been made, the course of a coun¬ 
try may nevertheless turn, due to slow erosion of implementation and in¬ 
cremental recommitments, but, we suggest, turning around under these con¬ 
ditions will be slower and costlier than it would be under a basic guid¬ 
ing decision. The greater effectiveness (or more accurately, the lesser 
ineffectiveness) of turning after a policy decision has been reached is 
expected to result not from the fact that once there is a fundamental 
decision all or most specific acts will be rationally geared to it. 
Considerable zigzagging is still likely to occur as a result of pres¬ 
sures to reverse or undermine the change in policy by private interest 
groups and segments of the public, ''second thoughts" by the highest 
authority, escalations by the enemy, and other factors. We propose 
only that tjrnability will be enhanced—to some degree—if a fundamental 
decision to recommit has been made before the actual turn-around occurs 
and is sustained, as it takes place. 

This proposition may seem quite self-evident; it should be noted, 
however, that there is a significant body of literature, both analytic 


21 

The hypothetical nature of this statement rests on the fact that 
as these lines are written no one knows if the President has made a 
policy decision or is enlarging on a present one. Of course, public 
declarations cannot be used as evidence in such matters. The lines were 
written before the May, 1970 invasion of Cambodia. 


561 





ACDA/E-156 


and empirical, which holds that democracies are unable to make funda¬ 
mental decisions and that the only major change of direction which does 
come about is due to accumulation of incremental decions, whose accumu -22 
lative effect is neither foreseen nor guided by a fundamental decision. 
President Nixon announced that he was withdrawing 5% of the American 
troops in Vietnam in June, 1969 and later announced additional small 
withdrawals. However, this did not indicate what course he would follow 
after these limited decisions were implemented as they could have been 
followed by additional small withdrawals, by larger ones, or even by the 
recommitment of troops. What is at stake is not the suggestion by incre¬ 
mentalists that the President (or other decision-makers) make contingency 
plans, for instance, deciding to continue to turn around in Vietnam only 
if the enemy would not escalate (or not too much), but that typically, 
decision-makers, faced with too many factors to speculate about (e.g. 
Soviet response, domestic pressures, situation in Laos, development in 
Korea, etc.) make only incremental decisions, leaving the door open for 
as many future alternative courses as possible. This includes continuation 
of the previous course and its reversal, that is, leave open even the 
decision as to whether the steps they undertook constituted part of 
turning around or not. 

This characterization of decision-making seems to us a correct 
one for the way many decisions, probably most, are made. Such a mode 
of decision-making is too rewarding for politicians in pluralistic socie¬ 
ties, for them to avoid using it. The question remains though: are 
there exceptional occasions in which fundamental decisions are made? 

And, when such decisions are reached do they enhance the turn-around? It 
might be said that even if there are exceptions they do not challenge the 
rule, but—as we see it—these are exceptional exceptions: as fundamen¬ 
tal decisions affect a myriad of incremental ones. Even if they are very 
rare, their significance may match or even outweigh that of the much more 
numerous incremental decisions. 

Regarding the first point, we note that the data provided by the 
incrementalists themselves illustrates that occasionally fundamental 
decisions are being made. We suggest that (a) most incremental deci¬ 
sions specify or anticipate fundamental decisions and (b) the cumula¬ 
tive value of the incremental decisions is greatly affected by the 
underlying fundamental decisions . 


The reasons leading to this statement are summarized succinctly 
in Charles E. Lindblom, ”The Science of Muddling Through,” Public 
Administration Review , Vol. XIX, No. 2 (Spring, 1954), pp. 79-99, and 
elaborated in his The Intelligence for Democracy (New York: Free 
Press, 1965). Our position is spelled out in The Active Society , Chs. 
11 and 12. 


562 

















ACDA/E-156 


Thus, it is not enough to show, as Richard Fenno did, that Congress 
makes primarily marginal changes in the Federal budget (a comparison of 
one year’s budget for a Federal agency with that of the preceding year 
showed, on many occasions, only a 10 percent or lower difference), 3 
or that the defense budget does not change very much in terms of its 
percentage of the Federal budget, or that the Federal budget remains 
the same in terms of its percentage of the Gross National Product.^' 

These "bit’' (or item) changes are often indicative of trends which were 
initiated at critical turning points when fundamental, contextuating 
decisions were made. The United States defense budget increased at the 
beginning of the Korean War in 1950 from 4.9 percent of the GNP to 10.3 
percent in 1951. The fact that it stayed at about this level (between 
9.0 and 11.3 percent of the GNP) after the war (1954-1960) did reflect 
incremental decisions, but these were made within the contextual deci¬ 
sion of engaging in the Korean War. 25 Fenno*s own figures show almost 
as many changes of above 20 percent as below this level. Out of 444 bud¬ 
get changes, within one year, 211 were 20 percent or larger. Seven bud¬ 
get changes represented an increase of 100 percent or more, and 24 bud¬ 
gets increased 50 percent or more. ^ Once Congress set up a national 
space agency in 1958 and consented to support President Kennedy’s space 
goals, it made "incremental,” additional commitments for several years. 
But, first, a fundamental decision had been made. Actually, Congress 
in 1958, drawing on previous experience and on an understanding of the 
dynamics of incremental processes, could not but have been aware that 
once a fundamental commitment is made, it is difficult to reverse. And 
while the initial space budget was relatively small, the acts of estab- 
lising a space agency and subscribing to the space goals were, in effect, 


23 

Richard F. Fenno, Jr., The Power of the Purse (Boston: Little, 
Brown, 1966). pp. 266 ff. See also Otto A. Davis, M.A.H. Dempster and 
Aaron Wildavsky, "A Theory of the Budgetary Process," The American 
Political Science Review , Vol. 60, No. 3 (September, 1966), pp. 529-547, 
especially pp. 530-531. 

9 / 

Nelson W. Polsby, Congress and the Presidency (Englewood Cliffs, 

N.J.: Prentice-Hall, 1964), p. 86. 

o c 

Ibid . While this decision itself had some "prepatory" bits and 
p ost-ho c specifying ones, a fundamental decision was made in 1950. One 
might consider a contextuating decision by the United States Supreme 
Court on desegregation which was then "spelled out" in a long series of 
incremental decisions. A decision-maker may make a fundamental decision 
when he intends to make an incremental one, for instance, if he wishes to 
keep his decision "minimal" and leave as many options as possible. 

26 

Nelson W, Polsby, p. 83. 


563 









ACDA/E-156 


supporting additional budget increments in future years. Of course, 
Congress and other societal decision-making bodies do make cumulative 
"bit’ 1 decisions without understanding the fundamental ones which under¬ 
lie them, but, often, what appears to be a series of "bit” decisions is, 
in effect, the extension of a fundamental decision. 

The reasons we expect a fundamental decision to reduce the costs and 
time of turn-around are several. The very act of making such a decision 
and its annunciation, even if only to a small circle of confidants and 
staff members, tends to commit the decision-maker to the new course and 
to reduce the chances that he will zigzag later, or the extent to which 
he will deviate whe.i he does. Also, it makes it more difficult for his 
staff and subordinates to revert to the old course or block the new one. 
Neither of these pressures can be expected to disappear but they can be 
expected to be smaller, after a fundamental decision has been made. 

True, such a basic change of direction, if it is announced ahead of 
time, provides an opportunity for greater mobilization of the opposition 
than when the change of direction is concealed (opposition includes here 
both domestic and international). Actually one of the deeper reasons 
fundamental decisions are often shunned is because there seems to be no 
way to keep them from the opposition. Still it seems to us there are 
occasions in which the gain in efficiency generated by making a funda¬ 
mental decision will outweigh the costs. The main reason experienced 
politicians tend to act as if the costs always exceed the gains is be¬ 
cause they tend to narrow their calculations to the short run. Like a 
chess player who is able to anticipate only three moves, they lose in 
those instances in which anticipating five moves would allow one, by 
absorbing a loss at the third round, to win the game at the fifth. In 
political life this takes the form of a great reluctance to sacrifice 
the pleasure of a major interest group or segment of public opinion in 
the short run, even if this is required to solve a problem (such as the 
war in Vietnam) and bring relief to all groups in the longer run. For 
instance, as late as March 1970, 7% of a national sample of Americans 
favored sending more troops to Vietnam and 38% advocated staying there 
for as many years as needed for the South Vietnamese to take over. 

(New York Times , March 15, 1970, Gallup Poll). It is not that politi¬ 
cians cannot see the longer run but that it has an unpredictable and 
hence risky quality in their eyes. Leaders differ from politicians, 
it may be said, in a greater capacity to act on the longer perspective; 
to make, when necessary, fundamental decisions. Also in the longer run, 
only a guidance system which is capable of making fundamental decisions 
will be effective if sharp turns are needed, a need which rises in fre¬ 
quency as environments change more rapidly. That we face an environ¬ 
ment which changes more rapidly than in the founding days of the Republic 
has often been pointed out. 


564 



ACDA/E-156 


In summary, we suggest that the capacity to make fundamental deci¬ 
sions is an essential quality for a system which can rapidly reduce its 
commitment to military missions and pick up domestic ones. This state¬ 
ment may sound tautological, but we hope the preceding discussion indi¬ 
cated the reasons many observers maintain that at least democracies are 
best at turning without such basic decisions, and the reasons we maintain 
they are necessary nevertheless. 


XIV.3.3. Organizational Fragmentation 

Armed vrith a fundamental decision to turn around, we must find the 
organizational tools for implementation. Implementation is more likely 
to be successful the less fragmented is the organizational network which 
is to carry out the decision. One of the most striking differences be¬ 
tween the military and domestic efforts of the nation is the much greater 
fragmentation of the domestic efforts. Frequent reference has been made 
to the lack of coordination and duplications in the Armed Services. 

While there seems to be some justification to these statements, in com¬ 
parison to the domestic front, the administration of military affairs in 
the United States is highly coordinated and streamlined. There are thirty- 
odd domestic agencies in contrast to three Armed Services. (True, there 
are divisions within each Armed Service, but that is also true within 
the domestic services, in addition to those among them). There is a 
Department of Defense which provides a measure of coordination to the 
Armed Services, but there is no Department of Domestic Affairs. There 
are two domestic agencies whose mandate specifically calls for coordina¬ 
tion of the services of the other domestic -agencies in one mission area; 
namely, the Office of Economic Opportunity and the Department of Housing 
and Urban Development. In effect, however, they tend to add to the wel¬ 
ter of agencies whose efforts should be, but are not, coordinated. The 
President does have a domestic coordinating role but he tends to spend 
more time on coordinating foreign and military policy than on domestic 
affairs. 

On the domestic front there is additional fragmentation and proli¬ 
feration of decision-making posts and efforts among the levels of govern¬ 
ment. Federal, regional, state and local authorities* efforts are often 
not highly harmonized. To turn around under these circumstances requires 
an almost Herculean attempt to get a large variety of authorities to pull 
together. 

As this frequently proves impractical, some efforts to reduce the 
fragmentation, or mitigate its consequences, have been made. These in¬ 
clude the creation of specialized agencies; delegation of authority and 
funds to the states and cities (which so to speak removes or reduces 
one level, the Federal one): still another attempt is the creation of 


565 






*• / 


ACDA/E-156 


local coordinating bodies for the various Federal agencies. Other acts 
which affect the level of fragmentation are the establishment of inter¬ 
agency committees and task forces (including several on the post-Vietnam 
environment), the expansion of the Bureau of the Budget, and increases 
in the White House staff. While some of these efforts have been much 
more effective from this viewpoint than others, e.g., the Bureau of the 
Budget for instance has a high reputation in this regard, but, by and 
large, the amount of governmental activity which needs coordination seems 
to have grown more rapidly than the capacities of the coordinating units 
and overlayers. The great and, it seems, growing fragmentation (435 new 
domestic programs initiated by President Johnson) in addition to increas¬ 
ing the costs and difficulties of government in general, makes it espec¬ 
ially difficult to turn around. It is as if one would try to turn one 
deck and one compartment of a ship as the others still steam ahead, in 
the previously set course. 

To overcome fragmentation it is not necessary to create a domestic 
super-bureaucracy, to form one agency which would deal with all domestic 
matters. Indeed, if such a department were created, the internal frag¬ 
mentations and bureaucracies might be as damaging as the existing one, 
if not more so. But splintering could be reduced by a measure of con¬ 
solidation (merging some agencies; some local governments); increase in 
the staff and authority of supra-units (such as the White House staff 
and the Bureau of the Budget);, and greater use of cross-agency "think 
tanks." The Urban Institute and the suggested Institute for the Study 
of Education are small beginnings in this direction. 

As the last avenue is the least explored and as we favor its appli¬ 
cation to the specific problem at hand, we shall elaborate our views on 
the possibility of setting up a Think Tank on the use of the "peace- 
dividend." 

Many of the problems that the nation has decided to attack are what 
social scientists refer to as the "system" type. Such problems have 
deep roots, are widespread throughout the society and cannot be handled 
conveniently by taking them one at a time with a dozen agencies each 
trying to trim its branch of the societal tree. 

Example: Many of the poor to be helped by the antipoverty drive 
are Negroes. What is less often stressed is that the other major group 
of poor people is diehard segregationist. The more effective the ameli¬ 
oration of their poverty, the less violent desegregation is likely to be. 

Most other domestic problems are of a similarly intricate "system" 
nature in which affairs handled in one sector of the society are affected 
by and affect matters in other sectors. It is a commonplace among 



566 


ACDA/E-156 


students of American government that the Federal approach to national 
problems is just the opposite of a system approach: each Federal 
agency focuses on one or a few aspects of a total problem. 

While Federal coordination on the domestic front might be increased 
to a degree, as has been done in the defense area, we must assume, at 
least for the short run, that it will remain more or less low, as it is 
now. A score of agencies will each continue to reform their respective 
slice of America, jealously guarding their empires from encroachment and 
exposure by the others. 

One major way to provide the system approach is to include at the 
level of policy what cannot be provided at the level of executive action. 
What is needed is more studies of the Nation as one combination of socie¬ 
tal forces and processes, all interacting with each other, all affecting 
each other. 

This is not a question of one more research job: many Federal 
agencies have research and development divisions and all have some form 
of intellectual input in the form of expert advice, consultants or advi¬ 
sory boards. The problem is that this thought input itself is fragmented 
along the same lines as the agencies. 

Relatively little investment is made in studying the way things hang 
together, the changes in one section that hinder or assist those in 
others. On the domestic front, we still study each weapon rather than 
entire weapon systems. 

The conditions under which the system approach thrives can be 
specified. They are rarely satisfied by a White House conference in 
which a large number of eminent men are flown to Washington for 3 days 
of discussion. Nor can such an approach be fruitfully developed by White 
House advisory committees whose members have scores of other assignments. 

And whatever the value of such reports, they rarely have a "system" 
quality. Needed is a much more continuous, professional, systematic 
effort. The Air Force provides a good example. Without judging here 
the general posture or the specifics of the strategy the Air Force 
"think factory" (the Rand Corp.) turns out, the work it turns out tends 
to be highly systematic. The Air Force has retained for more than 10 
years a sizable professional staff drawn from a large variety of discip¬ 
lines. These researchers are paid comparatively high salaries, which is 
necessary to compete with rising academic salaries and to retain the same 
personnel over long periods. The Air Force gave this "think" corporation 
considerable autonomy and put it 3,000 miles from Washington and its 


567 


ACDA/E-156 


t 1 / 


daily political life.^ 

What seems to be needed is a similar institute for domestic problems. 
The ratio of social to natural scientists would have to be much higher 
than in the Rand Corp. and the domestic Rand might well report to the 
White House rather than to any one Federal agency. 

This group would study questions that cut across the responsibili¬ 
ties of any Dne Federal agency and examine the effects that programs 
planned by one agency could have on those of another. It would also ask, 
using the tools of modern social science, what will be the cumulative 
effect on our society of increased population, migration to cities, auto¬ 
mation, mass education, etc., not independently for each process, as if 
the others do not exist, but as they work on each other. 

These relationships are now occasionally explored in a "system" 
fashion by nonprofessionals or as a rush job by not fully qualified re¬ 
search organizations, often with a partisan or commercial bias. It seems 
worth the $2 million or so that it would cost to find out what could be 
achieved if a team of the best social scientists the Nation can recruit 
were put on the job on a full time, fully professional basis. 

Domestic policy deserves the same systematic strategic thought that 
our military policy has enjoyed. 


XIV.4 THE TURN-AROUND OPTIONS 

There are four major ways in which a societal program may be turned 
around; we discuss them here with specific reference to the reduction of 
Federal investment in military missions and an increased commitment to 
domestic programs. 

(A) One may change the missions of existing units within existing 
organizational structures; e.g., assign the Military Air 
Transportation Service to help poor people who seek to move 
from underdeveloped areas to locations where employment is 
available. 

(B) One may transfer a unit from one organizational structure 
(e.g., a military service) to another (a civilian agency); 
for example, transfer the Military Air Transportation Service 
to the Office of Economic Opportunity, 


See Bruce L.R. Smith, The Rand Corporation: Case Study of a 
Nonprofit Advisory Corporation (Cambridge: Harvard University Press, 
196 W- 


568 





ACDA/E-156 


(C) One may dismember a military unit and transfer the components 
separately (e.g., transfer planes, pilots, maintenance crews) 
so as not to maintain the identity and system of relationships 
of the original unit. 

(D) One may transfer knowledge or managerial conceptions (such as 
System Analysis) without necessarily transferring any unit, 
men, facilities or funds. 

The dimension along which the four options are arranged is the de¬ 
gree of conversion required. The first option entails only a change of 
mission without a change in the structure or composition of the unit. 

The second option entails changes both in the unit's mission and in its 
control overlay (in terms of who is in charge). The third option entails, 
in addition to a change of mission and control, a restructuring of the 
relations among the component elements. The fourth option is a residual 
category since the transfer of knowledge may or may not require conver¬ 
sion efforts. The significance of these differences in the degree of 
conversion the exercise of different options requires is explored below. 
Here we should reiterate our previous point that turnability is not syno¬ 
nymous with conversion; some, actually considerable, turn-around may be 
obtained without conversion. 

The four options also differ in the mechanisms employed. The first 
and second options involve the use of organizational control mechanisms 
and administrative decrees; and, especially if the turn-around is sizable, 
at least some consensus-building. The third option operates largely 
through the marketplace, although this can be in part regulated. Trans¬ 
fers can be encouraged and to a degree guided by budgetary changes; for 
instance, if subsidies to civilian airlines are increased significantly 
and at the same time the budget of the Military Air Transportation 
Service is cut sharply and its planes offered for sale rather than moth¬ 
balled, some "reallocation” from the military to the civilian sector 
will be achieved, although no direct specific reassignment of men or 
material from a military to a civilian task will have occurred. The 
fourth option may work through either administrative channels or the 
marketplace. 

As our analysis focuses on the conditions of a large scale trans¬ 
formation, we recommend that all four options be exercised at one and 
the same time . Each option has some drawbacks and some advantages of 
its own. Together they provide not only a broader but also a more ver¬ 
satile and mutually complementary approach to turning around than does 
reliance on one or two of these options. Still, one may ask: Which 
option and hence which mechanism should be relied upon more heavily? 

The most suitable form of transformation for our society as presently 
constituted seems to be that of shifting components via the marketplace 


569 





ACDA/E-156 


(i.e., option C); the next bes» is the transfer of units (i.e., option 
B). A major change can be accomplished more ©wiftly through this means 
than through market reallocation and more direction can be given to the 
new commitment of the manpower and facilities, however, this option 
also requires more nation-wide planning and may encounter, we shall see, 
greater conversion difficulties. Option D, the transfer of knowledge, 
is both one of the most promising and most dangerous options; promising- 
if applied on the proper level of abstraction and with the appropriate 
correctives; dangerous—when the knowledge transferred is applied 
mechanically. While redefinition of mission (option A) seems to us the 
least desirable, there are some domestic missions which may be best car¬ 
ried out in that: way. These problems will be examined more closely in 
the following discussion. 


XIV.4.1 Mission Change and Structural Change 

A general proposition underlying much that follows is that the or¬ 
ganizational structure most suited to carrying out a mission is the 
structure specifically designed and evolved with that particular mission 

in mind (e.g., NASA, for space missions). When attempts are made to 
change the missions to be carried out by an existing unit (and especially 
when the change is major), far-reaching structural adaptations are likely 
tc be required if the old supra and/or unit structure is to be used 

efficiently and effectively . Since structural changes are costly in 
monetary and human terms, and tend to provoke resistance, we expect that 
option C will be, in general, more economical than B, and B more economi¬ 
cal than A. The value of D seems to be indeterminate from this viewpoint; 
knowledge-transfer '’works'* if the structural specifications are discarded 
and if the knowledge-transfer is properly abstracted. There is a widely 
accepted myth that organizations are social machines which combine a 
large number of individual efforts into a socially useable instrument, 
equally useful for almost any mission. Their special power is said to 
rest in the coordination of effort, achieved through highly specified 
role definitions and institutionalized lines of communication and author¬ 
ity, above all. None of these attributes is deemed to be institutionally 
specific; churches, armies, prisons, and schools are said to all have 
these attributes and hence it is also very widely assumed that organi¬ 
zational tools can be readily transferred from one application to another. 
(These assumptions underlie most textbooks on organizations because they 
discuss "organizations" without specifying which subcategories the 
points apply to.) 


570 











ACDA/E-156 


We subscribe to the opposite proposition: no two missions as we 
see it, can be served with equal effectiveness and efficiency^ by the 
same organizational structure* When the difference between two missions 
is considerable, the need for a different structure is usually equally 
as great. 


XIV.4.2. Mission Distance 


The capacity to adapt man, machines, or organizations seems to be 
more often overestimated than "under-assessed" in our optimistic culture. 
This may be illustrated by the following apocryphal anecdote: a major 
soft drink producer of the cola type is reported to have decided to di¬ 
versify by branching out into the coffee and orange juice business. All 
three seemed to be highly similar missions. But the diversification 
effort failed as the company soon learned that its special skills, which 
had won it a world-wide reputation, had little applicability in the pur¬ 
chasing of coffee beans or production of orange juice. More generally, 
diversification plans fail much more often than they succeed, ^ possibly 
because of unduly optimistic and rationalist assumptions about transfer- 
ability. 

Janowitz pointed out that on four key social and organizational 
dimensions, the "distance" between the military and the civilian sector 
is declining: (a) Organizational authority in the military is becoming 
less based on domination, more on initiative, and persuasion; (b) tech¬ 
nical skills grow in importance in both the military and the civilian 
sectors; (c) the military recruitment base has broadened socially; and 
(d) military ideology is less separatist and more "civilian."30 


2 « 

By effectiveness we mean the extent to which a mission is 
accomplished. By efficiency , the cost per unit of output. 

z9 A study of diversification of twelve defense firms stresses, as 
its first finding, the importance of strong commitment of top management 
to the program. John S. Gilmore and Dean C. Coddington, Defense Indus¬ 
try Diversification: An Analysis with 12 Case Studies , U.S. Arms Control 
and Disarmament Agency Publication 30 (Washington: Government Printing 
Office, 1966), p. vii. The "sub-culture" of the executive world, the 
study reports, contains numerous accounts of failures to diversify; a 
belief that "the defense customer" does not favor commercial diversifica¬ 
tion, and a recognition that "there is little indication that the owners 
of defense firms or the financial community wish defense manufacturing 
to diversify." Ibid . 

3 °Morris Janowitz, The Professional Soldier (New York: Free Press, 
I960), pp. 8 ff. 


571 f 











ACDA/E-156 


According to the U.S. Department of Labor: 

Until World War II, service in the Armed Forces provided 
little experience and training that could be carried over 
into civilian employment, but since then the onrush of 
technology has transformed our fight:.ng force into a mili¬ 
tary machine whose mainstay is the skilled technician. As 
a result, for all services combined, the enlisted force 
requires three mechanics or technicians for every man in 
ground combat, and the number of highly skilled electronics 
repairmen alone exceeds the number of infantrymen (as of 
1963). 31 _ JfiH 

At the same time, as we see it, while the distance has declined, it 
still is large; and on other dimensions than those considered by Janowitz 
the distance seems to have increased. For instance, the military deals 
with ever more esoteric and hostile environments (e.g., nuclear weapons 
in space) which are very different from the routine surroundings we take 
for granted like our schools, hospitals and homes. 

Further, factors which may have first actually narrowed the distance 
now seem to be increasing it. Civilian attitudes toward the military 
seem to have undergone such a change. Though the military is less 
"militaristic" in its outlook than it used to be, it does not follow 
automatically from this fact that the civilian population will view the 
military more sympathetically. Actually, it seems that the public at 
large held unfavorable attitudes toward the military during the Depres¬ 
sion^ and wa s much more positively oriented toward it during World War 
II and during the early Cold War Years. Since the escalation of the war 
in Vietnam, a renewed disaffection with the military, at least in some 
segments of the public, seems to have set in. 

The context of public views in which conversion takes place will 
influence the extent of the gap which must be closed. As these lines 
are written, returning GIs, especially discharged officers, who served 
in Vietnam, are not received with particular affection or enthusiasm, 
nor is there a widespread feeling that our Vietnam soldiers deserve spe¬ 
cial attention or treatment as they return to civilian life. 33 Such an 


U.S. Department of Labor, Transferring Military Experience to 
Civilian Jobs . . . p. 1. 

32 

For a literary illustration of the pre-war attitudes toward the 
Army, the reader is referred to James Jones, From Here to Etemitv (New 
York: Scribner, 1951). 

33 

Sandra Blakeslee, "Crippled Veterans Find Hospitals Crowded and 
Attitudes at Home Ambiguous," New York Times . April 3, 1970, p. 19. 

572 








ACDA/E-156 


oimentation running from indifference to hostility is new in modern 
American history and makes the conversion and absorption of returning 

veterans into civilian life more difficult than it was twenty-five 
years ago. 


We recommend that if large-scale conversion is to occur in an 
environment of public opinion unfavorable to the military (this situa¬ 
tion is likely to prevail, because if the need for the military were 
urgent and visible, large-scale conversion would be unlikely), special 
efforts be made to encourage the public to welcome the military men 
being released. 

Finally, the decline in distance between the military and civilian 
sectors may have taken place much more for some military units than for 
others. The Air Force is highly technical, as are some civilian indus¬ 
tries', but this seems to be much less the case for the regular Army 
units. Moreover, the highly technological units are those which have 
grown closer to each other in social terms but more distant technically 
while the less technical units have remained more remote socially. 

All said and done, the gap between most military missions and most 
civilian ones seems to us to still be considerable, which serves fur¬ 
ther to explain why options A and B may not provide sufficient conver¬ 
tibility and why we favor, on balance, option C. 


XIV. 4.3 Option A: Redefinition of Missions 

Speaking on a high level of abstraction, we suggest that as little 
of the turn-around as possible should be carried out by military units 
whose structure is kept intact. This suggestion is based upon the .ten¬ 
dencies of existing structures to resist change, the great differences 
in military and civilian missions and the relatively great power the 
American military acquired after World War II. There is little evidence 
that the military is more "cost effective" in carrying out most domestic 
missions than are civilian agencies or the private corporations. Even 
if the military were, in a narrow sense, regularly more efficient or ef¬ 
fective, this might be viewed as a major reason to develop the civilian 
agencies. If the military should acquire the halo of a savior on the 
domestic front in addition to its natural national security function, the 
survival of our existing political system might well be seriously ques¬ 
tioned. Moreover, the assignment of civilian missions to the military 
would further weaken the civilian sector as the military would utilize 
more young men, R and D manpower and other resources that otherwise 


t 


573 



ACDA/E-156 


might go to strengthen the civilian sector. 

There remain two relevant questions: Will involvement in the trans¬ 
formation reduce or increase the natural resistance of the military to 
the suggested change in priorities? Are there any civilian missions 
which some branches of the’military are especially suited for and there¬ 
fore might be drawn upon to carry out, even if they are excluded from 
participation in the new, overall domestic drive? 

It is difficult to assess the consequences of military involvement 
in civilian missions which require large-scale efforts since there seems 
to be no precedent for such a drive in the United States or other coun¬ 
tries. Typically, military involvement in '’civic action” in Latin 
America or Israel has meant small-scale operations, involving at most one 
percent of the resources available.^ Several ’’civic action” projects 
are conducted more with an eye to public relations than to a major com¬ 
mitment or mission shift. In one of the Israeli projects, long abandoned, 
high school para-military training units were flown to the Southern Negev 
to grow tomatoes in a garden, at the average cost of $4 a tomato. The 
project was widely reported in the press as having an ’’educational” 
rather than an agrarian or economic value. 

Theoretically, it might be possible to ease conversion by involving 
the military as a support force for various domestic missions on the 
assumption that excluding and isolating the military would tend to unify 
it as a powerful opposition to the nation’s primary domestic commitment. 
Although involving the military in many-faceted domestic affairs would 
reduce its opposition and divide it, the military would be the larger, 
more organized, more powerful and more legitimated partner of any such 
combination (say, the Air Force working with the Office of Education, 
and the Army with the Office of Economic Opportunity), and it seems like¬ 
ly that the military viewpoint, tradition, authority pattern, etc. would 
prevail. That is, instead of the military being converted to civilian 
ways of doing things while performing civilian missions, it seems more 
likely that the military would pull things its way. For instance, it 
might attempt to organize training programs for disadvantaged persons in 


34 

See William Gutteridge, Military Institutions and Power in the 
New States (New York: Praeger, 1965); Ronald C. Nairn, International 
Aid to Thailand (New Haven, Conn.: Yale University PreslTj 1966); 
Leonard Binder, Iran: Political Development in a Changing Society 
(Berkeley: University of California Press, 1962); and Richard Barnet, 
Intervention and Revolution (New York: World Publishing, 1968). 


35 


Based on interviews in Bolivia, Guatemala, and Israel. 


574 











ACDA/E-156 


the authoritarian manner new recruits are trained. As the military 
patterns of behavior do not seem suitable for carrying out most 
domestic missions, we recommend foregoing the political support one 
may gain by involving the military in civic missions in order to 
insure a more complete turn-around and the strengthening of civilian 
agencies as well as of the civilian orientation. 

We note in passing that we are unaware of any study in the 
American context of the effect of 'civic action" on the military who 
participate in such activies, or on the civilian agencies whose mis¬ 
sions they preempted or participated in. Such a study seems called 
for and may change our view, which is based largely on the study of 
societies such as Bolivia, Guatemala, and Turkey whose civilian sec¬ 
tor was much weaker than ours in the United States and hence more 
given to "uncivilian" slanting by military involvement. 

As to the second question, whether the military is particularly 
suited to carry out a few specific civilian missions even if it is 
generally unsuited and to be excluded from domestic activity—a 
review of its organizational features points both to some special 
opportunities and their limitations. The military is free of many 
of the local political restraints—it is "extra-institutional." 

For instance, it is said it could develop low-cost housing because 
it is not bound by labor unions, local building codes, and so forth. 
As we see it, while the military seems to command more leeway than 
domestic agencies, it keeps this apparent power mainly by not using 
it on the home front. If the military attempted to engage in large- 
scale civilian operations that violate established civilian laws or 
norms, would the interest groups which limit civilian reforms not 
impose similar limitations on the military? The desegregation of 
military bases suggests that there is considerable leeway, but these 
changes involved only on-the-base, intra-nilitary relations. / 

Perhaps on-i;he-base building practices are quite "free" from societal 


Resources available to our study did not suffice to check 
this point. Hence, the hypothetical nature of our statement. 

Editor’s note: It might be pointed out, however, that 
during the summer of 1967 ex-Secretary of Defense Robert S. 

McNamara issued an order forbidding white servicemen to rent 
apartments in off-base housing which discriminated against minority 
group servicemen. Students of this problem have concluded that 
this and related sanctions instituted by his successor, proved 
highly effective. 


/ 


575 





ACDA/E-156 


regulation and could be innovative as long as this were not carried 
out explicitly (as was suggested by Secretary Clifford) as prepa¬ 
ration for ciyilian, off-the-base, building. If such efforts are 
carried out on a significant scale* we could expect powerful oppo¬ 
sition to be triggered which would limit the usefulness of the mili¬ 
tary^ extra-institutionality. 

To the extent the military’s special status can be relied upon, 
a technical question arises concerning the effects of dissociating 
the development of technological or social prototypes from the con¬ 
ditions of their applicability. For instance, will the development 
of a low-cost house on a military base really take into account the 
needs of members of the deprived class, slated to live in it or the 
objections which labor unions raise to the use of some prefabricated 
materials as against others which are acceptable? 

Vocational training is another area in which it seems sensible 
to draw on the military for a specific mission, even if one does not 
otherwise seek to involve it in an escalated domestic drive. The 
military is already one of the greatest sources of such training in 
the country, simply because it trains millions of men for its own 
vocations. In addition, the military recently developed schemes 
aimed at training—in service—enlisted men for civilian life. 

These programs are of two major kinds: (a) training for civilian 
life before discharge, mainly carried out by Project Transition,®® 
and (b) training which serves the men both during their military 
service and after they are discharged. A case in point is the ^9 
improved command of English and math provided by Project 100,000. 
Both projects disproportionately benefit persons of disadvantaged 
backgrounds. 

Although a detailed assessment of Project Transition and 
Project 100,000 cannot be undertaken here, several factors should 
be highlighted. 


38 

Office of the Assistant Secretary of Defense (Manpower and 
Reserve Affairs), The Transition Program (Washington: Government 
Printing Office, 1968). 

^"Project 100,000: The Training of Former Rejects," Phi 
Delta Kappa , July, 1969, pp. 1-8; and the New York Times , January 
27, 1970. 


576 








ACDA/E-156 


One major consideration concerns the source of the resources 
to be used. Obviously, if the utilized resources are already 
allotted to the Department of Defense but here are turned to 
training men for civilian life, we have, by definition, an act 
of turning around and if it is large in scale, a significant one. 

On the other hand, if the costs of these projects are added 
on top of the military ones, increasing the total budget of the 
Department of Defense, or at least part of the costs are charged 
to civilian agencies (to the Department of Labor in the United 
States, or to A.I.D. in Bolivia), then the opposite effect is 
achieved: civilian funds are coming under military control. Only 
if one could demonstrate that these funds are used much more 
effectively by the military coild one see here a touch of conversion. 

A third possibility is that such projects might be fueled by 
the voluntary efforts of the officers. However, this would so 
sharply constrain their scope, that they fall outside of our pur¬ 
view—the study of significant turn-around. Other such projects 
include emergency services when floods, earthquakes, or hurricanes 
occur. They are useful, and if the military were not available to 
help out, additional investment in civilian preparations for 
emergencies would be needed; but these again are not macroscopic 
savings. 

In short, there are some civilian projects which military 
units could carry out effectively, but only under special con¬ 
ditions (especially that they be financed by funds previously 
committed to military missions) do they actually constitute 
acts of turning around—and even then—leaving them in military 
hands might constitute a drawback which offsets most if net all 
the gains. This is well illustrated by the "economy" achieved by 
turning riot control over to the Armed Forces; it may get them 
into the habit of occupying cities and regulating civilian life. 

With rare exceptions, those concerned with the conditions under 
which our kind of pluralistic society is maintained must conclude 
that the military had best confine itself to nondomestic missions 
and, when it no longer needs resources, they are best released 
to civilian hands rather than used by the military for domestic 
missions. 


577 



ACDA/E-156 


XIV.4.4 Transferability of Units Versus That of Components 

(Option B versus C) 

The main reason it could seem rather appealing to transfer a whole 

uhit from a military to a civilian assignment—thus changing at once 

both the mission and the control structure-—is that in this way large- 

s :ale transitions can be accomplished, rapidly, with minimum costs and 
difficulty; and guidance could be given not only to the units which 
release the resources but also to the units which gain them. For 
example, when NASA was first founded, a major Army laboratory was 
transferred to its control, test tubes, research assistants, pay masters 
and all. By way of contrast, if the unit is dismembered, this in itself 
would incur some psychic and financial costs, and then the rather im¬ 
perfect market mechanism must be relied upon to bring the men and 
facilities together again where they are needed. Indeed, the advan¬ 
tages of a unit transfer are so clear that we recommend that this 
mechanism be relied upon when there are clearly identifiable civilian 
needs for which military units can be used. 

Thus, if a major reduction in the level of Armed Forces takes 
place, whole hospital complexes and other medical facilities may be 
turned over to Public Health Departments of the states in which they 
are located, or—to community action corporations, if any are nearby. 

The examples utilized so far refer to instances in which the 
civilian mission seems not to require major modifications of the 
military unit; the technological and manpower specifications seem 
relatively similar. Note, though, that these are atypical instances, and 
that even in these we immediately see serious difficulties (civilian 
opposition, and the carry-over of military attitudes) which rest in part 
in the unit mode of transferring. If the planes were sold and the 
pilots discharged by the military and hired by the civilian sector, 
i.e., shift from option B to option C, the opposition of the private 
sector would wane. Similarly, if the schools were turned over to 
existing systems, but the military instructors were sent to qualify in 
established civilian teacher colleges and then blended into existing 
school systems, the authoritarian carry-over would be more effectively 
countered. 

Furthermore, transferring whole units requires a relatively high 
degree of national planning. There must be an agency which is able to 
identify both the domestic needs (whose expressions are frequently 
localized, complex, and varied) and the military units ready to be 
released, match them more or less in size (it obviously will not do to 
assign an Army unit with a hundred trucks to Montana farms if they need 
at most ten, etc.). In contrast, the market mechanism, used in option 


578 




ACDA/E-156 


C, would break the units into smaller parts (in the case at hand, into 
individual trucks or small sets) and avoid the need for central plan¬ 
ning. We recommend that if option B is used, a military-civilian 
matching center should be set up. 

* 

‘ 1 

■% 

When the military and civilian mission requirements are substan- 
tially different, which they very often ire, the transfer of a unit 
will require substantial restructuring and this, we suggest, is best 
achieved if the unit is first dismembered. 

xtie reasons that this is the case lie in part in the fact that 
different missions require working with different kinds of manpower 
(e.g., a high Ph. D, mix versus a chiefly blue collar one) which 
respond to different forms of supervision; that different amounts and 
kinds of technologies are involved which, in turn, require different 
degrees of coordination and supervision; and that different information 
is needed and hence the specific knowledge of one operation is rarely 
transferable to another. Also, existing social units tend to 
develop interpersonal and leadership bonds as well as sub-cultures. On 
rare occasions, those can be mobilized to support the transition; on 
all others—they will slow it down. 

The mission specificity of organizational structure and its "stick¬ 
iness ft (or resistance to change or conversion) is the main reason why 
option C, in which the old unit is dismembered and its components 
spread among several existing, civilian, units, is in most cases more 
effective than option B in achieving rapid and full conversion. 

The main drawbacks of this option, and the reason the other ones 
cannot be rejected out of hand, is that it involves a measure of waste, 
is slower than option A or option B, and evokes more fear and possible 
political resistance among those about to be cast into the marketplace. 
These wastes, fears, and pressures may be reduced by various mechanisms 
such as labor exchanges and pre-discharge hiring by civilians, but 
cannot be eliminated; hence, especially when large-scale turn-around 
is to be considered, the other options may be drawn upon. They can 
be applied more readily the smaller the distance between the old and the 
new missions. 

Our assumption that firmly established social bonds and structures, 
of the sort often found in the military, solidify individual resistance 
to change, is based upon many social science studies which are sum¬ 
marized in a review book by Berelson and Steiner. u Individuals 

^Bernard R. Berelson and Gary A. Steiner, Human Behavior (New 
Yojrk: Harcourt, Brace and World, 1964), pp. 354ff. 


579 




ACDA/E-156 


function as members of social groups, which means that they have emo¬ 
tional ties to each other that are supplemented by cognitive and norma¬ 
tive bonds. That is, they tend to view the world in similar ways, 
share values and sentiments, etc. While not all organizational units 
provide the main basis of social life, many of them do as people 
interact more at work than in most other situations. This is especially 
true in the military, and most of all, when the men live on the base in 
the same unit, which, in effect, turns it into a broad scope if not 
total organization. 

Scope refers to the number of social spheres into which an organi¬ 
zation penetrates. Thus, prisons penetrate more—by regulating leisure 
and work, prayer time and interpersonal relations (by assignment to 
wards and cells) than factories, not to mention voluntary organizations. 
The impact of an organization on its members tends to grow in extent 
and depth the broader its scope.41 


Thus, if we take for instance a military school for jungle warfare 
and tell the instructors to train children from disadvantaged back¬ 
grounds, let us say in automobile mechanics, aside from the difficulties 
the instructors will face in acquiring new teaching material, develop¬ 
ing new teaching facilities and other problems common to the conversion 
of all organizational units which change a mission, they will also face 
the special problems involved in the military "mentality."^ Thus, 
for instance, the military puts a higher stress on neatness, punctuality 
and automatic acceptance of authority than many civilian jobs require, 
or a citizen should get used to if he is to function effectively in a 
democracy. It is possible to help the military instructors to become 
more tolerant of less tight patterns of clothing, time rhythm and 
authority, but this will require considerable efforts. Speedier 
results may be obtained if the military instructors are absorbed in an 
existing civilian school system and the jungle warfare school’s facil¬ 
ities are transferred. 


The difficulties encountered in moving whole units, rather than 
components, differ for different kinds of men. Shifting enlisted men, 
who are in their backgrounds disproportionately from lower class and 
disadvantaged backgrounds, poses different problems from shifting 


For additional discussion as well as evidence, see Amitai Etzioni, 
A Comparative Analysis of Complex Organizations (New York: The Free 
Press, 1961), pp. 161ff. 

42 

Not everyone in the military has it, but many, we suggest do. 

See Albert D. Biderman, "What is Military," in Sol Tax (ed.). The 
Draft (Chicago: University of Chicago Press, 1967), pp. 122-137. 


580 






ACDA/E-156 


officers vwith executive backgrounds), who are again different from 
professionals (from physicians to research and development men). 
Additionally, there are differences within each category. 

XIV,, 4.4.1 Iransferability of Executives 

In a previously published work,^~ we demonstrated that corporate 
todies, in which most rarge-scale work of military or civilian nature 
takes place, differ systematically in their compliance structure. 

There are three archtypes of compliance—coercive, in which the organi¬ 
zation relies on force primarily to keep its lower participants in 
pLace (e.g., a prison) and they are highly alienated; utilitarian 
compliance, in which the organization relies chiefly on monetary re¬ 
wards to keep the lower participants working (e.g., in factories) and 
they tend not to be deeply committed to the organization; and norma¬ 
tive compliance in which the leaders seek to build up and sustain the 
moral commitments of the lower participants by the manipulation of 
symbols (as in a social movement) and they are highly committed to the 
organization. Additional research shows that organizations which 
differ in their compliance structure (each concrete organization being 
a mix of the three archtypes), also differ on a large array of organi¬ 
zational attributes including the goals they can serve effectively.^ 
The compliance profiles of military services are very different during 
peace and war-time. The military compliance profile is highly utili¬ 
tarian in peace time (participation often being viewed as a kind of 
public service) and a mix of normative-first, coercive-second, in war 
time. In line with the compliance theory, when peace time units move 
into combat, frequently a shift of leadership occurs, as those best at 
keeping the units working routinely or looking neat are rarely best at 
leading them into combat. The same need to "shift" executive personnel 
occurs when units are returned from combat duties to peace time duties. 

These shifts do not entail discharging one set of officers (or 
demoting them) and recruiting (or promoting) a different set. Instead, 
many other mechanisms are at work, the most important of which is a 
major change in the number of personnel. The shift to a war basis 


43 

Amitai Etzioni, A Comparative Analysis of Complex Organizations , 
pp. 23ff. 

^ Ibid ., Chapter 3. For a review of evidence published after the 
theory was published, see Amitai Etzioni, "Organizational Dimensions 
and Their Interrelationships: A Theory of Compliance," in Bernard P. 
Indik and F. Kenneth Berrien (eds.). People, Groups, and Organizations 
(New York: Teachers College, Columbia University, 1968), pp. 94-109. 

381 


/ 








ACDA/E-156 


usually entails a very large scale mobilization and hence justifies 
the recruitment and promotion to officer 1 s rank of many ’’outsiders" 
(often college boys or insiders who under peace-time conditions would 
have been considered unsuitable). With the return to peace time, dis¬ 
charge of a large number of officers allows a selection process to 
retain those who are more suitable for the utilitarian kind of 
compliance. 

We say "allows" because we do not know to what extent the Armed 
Forces take these considerations into account. Our impression is that 
to some extent they are conscious of them and act upon them, and that 
other factors also help to promote a "functional" selection procedure 
at this time, including the fact that professional Army men, left over 
from the pre-war utilitarian days, are more likely to stay for the new 
utilitarian period. Other adaptive mechanisms are also available 
(e.g., increasing the importance of disciplinary personnel such as the 
Sergeant Major in the British Army, with the transition to peace and 
decreasing that of the roles in which leadership is invested such as 
that of the First Lieutenant). 

The main point for our purposes here is that all these mechanisms 
allow organizations such as the Army to turn around without relying on 
a capacity to retread, retrain or otherwise "restructure" the officers 
so they will be as effective in the new compliance mode as they were 
in the previous one. Such a shift, we hold, is very difficult to 
accomplish. As this is a central point for the discussion at hand, 
we elaborate it next. 

The lesson of all this for the issue at hand is both evident and 
direct: the compliance structure of the military services is quite 

different from that of the civilian sector, and the transition from one 
compliance structure to another cannot be negotiated without consider¬ 
able difficulties. Officers who served mainly in the wartime army, 
especially in combat units, are expected to find the transition to 
industrial corporate life much more difficult than those who served in 
peace time. Combat officers will find the transition easier if they 
move into work which requires more leadership than the industrial 
realm (e.g., run for public office) or where coercion may at least 
potentially be applied (e.g., in prison management). While this does 
not offer a very sanguine picture of the opportunities for easy or 
speedy conversion, it seems to be a realistic picture. Next to 
differences in the technologies used by the military and by the 
civilian sectors, differences in the way compliance is maintained is 
probably the greatest hurdle discharged officers must negotiate. 


582 



ACDA/E-156 


—^‘ 1 * a —Executi ves _as Compliance Specialists. Applied to the study 
of intra-organizational and inter-organizational mobility of executives, 
the following three alternative propositions can be formulated: 

(1) An executive will be most effective if he holds positions in 
which the same or similar types of performance are supervised, and the 
same basic knowledge and skills are required. Division of labor and 

technology are believed to determine the scope of effective horizontal 
mobility. 

Drucker is explicit on the subject and does not limit himself to 
the lower levels of management. He states: 

It means in the first place that the skills, the competence, the 
experience of management cannot, as such, be transferred and 
applied to the organization and running of other institutions. 

In particular a man f s success in management of a business carries 
by itself no promise—-let alone a guarantee—of his being success¬ 
ful in government. A career in management is, by itself, not a 
preparation for major political office—or for leadership in the 
Armed Forces, the Church or a university.^ 

(2) An executive controls people, and since this is the basis of 
all organizational control, effective horizontal mobility is virtually 
unlimited. Dubin represents this alternative position. He asserts: 

Note one thing. I have not said that the education of an 
executive, as executive t includes learning to be management- 
minded, government-minded, union-minded, or organization-minded 
in terms of the special value system of the organization that 
employs him. Inevitably, every executive and administrator 
gets 9 minded < in accordance with the values of the organization 
for which he works. I submit, however, that the educated execu¬ 
tive is one who can operate effectively in different kinds of 
organizations having different values and objectives. Barnard, 
himself, is an outstanding example of this...Here is a man who 
wrote the classic. Functions of the Executive , and pursued 
successive or concurrent careers in a business organization, as 
a government official, as director of a vast social service 
organization and now, as top executive of a philanthropic 
institution.^ ' 


^^Feter F. Drucker, The Practice of Management (New York: Harper, 
1954), pp. 8-9. 

^Robert Dubin (ed.). Human Relations in Administration (Engle¬ 
wood Cliffs, New Jersey: Prentice Hall, 1951), pp. 3-4. 


583 












ACDA/E-156 


The "universal" approach to the functions and characteristics of 
executives is clearly dominant in the literature. Barnard studies the 
functions of the executive, just as students of organization, we saw 
earlier, study the bureaucracy, not particular types. Lists of 
qualities of executives are typically lists of qualities every person 
should be blessed with (such as capacity, knowledge, courage, 

"quality") and those required of every officer (effective use of time, 
perspective and judgment, self-control) or leader (personal power, 
sensitivity). A study of 3,000 executives by Randle is one of the 
few which supplement a list of "universal" characteristics with some 
specific traits which distinguish subgroups of executives .^ 

Some exponents of the universal approach imply that profit-making 
organizations supply a model for the administration of all types of 
organizations. Business methods and business personnel are seen as 
best fitted to run any organization, whether a school, a hospital, or 
a Community Chest. Churches have been criticized for not adopting 
business methods. Harrison states: 

The American Institute of Management, which conducted the survey, 
was generally critical of religious groups in this country 
because "viewed against the background of modem business cor¬ 
porations, the management practices of religious organizations 
are appallingly archaic." 

A similar study of the Catholic Church, sometimes referred to by 
members of the clergy as the "G. M. study of the Church," recommended 
that the Pope delegate more authority to his subordinates (decentrali¬ 
zation is good for business), and that the Church create reserve funds 
and keep its budget in the black. Students of hospitals have similarly 
claimed that "industrial techniques can be transferred."^ 

Ministers frequently complain about the lack of insight into the 

differences between a church and a business which businessmen reveal 

when they assume that every organization can be run in basically the 

same way—their way. 

_ 

C. Wilson Randle, "How to Identify Promotable Executives," 

Harvard Business Review . Vol. 34, No. 3 (May-June, 1956), pp. 122-134. 

48 

P. M. Harrison, Authority and Power in the Free Church Tradition: 
A Social Case Study of the American Baptist Convention (Princeton: 
Princeton University Press, 1959), p. 5. 

49 

C. K. Andrew, "Industrial Techniques Can Be Used," Modern Hospi¬ 
tal* Vol. 84 (1955), pp. 67-72; and M. Greenblatt, R. H. York and E. L. 
Brown, From Custodial to Therapeutic Patient Care in Mental Hospitals 

(New York: Russell Sage Foundation, 1955), p. 21. 


584 











ACDA/E-156 


Ihe high representation of business leaders and the low represen¬ 
tation of labor leaders on the boards of hospitals, schools, colleges, 
universities, voluntary associations, and other nonutilitarian organi¬ 
zations in the United States reflects in part the political reality of 
the communities in which these organizations operate and which they 
serve. But to some degree it also reflects the assumption that every 
organization can be run like a business. 

(3) Our position is that the effectiveness of the mobile executive 
is limited to compliance areas rather than administrative or techno- 
logical boundaries. As long as mobility takes place between positions 
in organizational units or organizations which have a similar com¬ 
pliance structure, we would expect comparatively little loss of effec¬ 
tiveness. If, on the other hand, mobility requires transfer from one 
Kind of compliance structure to another, considerable changes in 
behavior, orientation, or effectiveness of the executive are to be 
expected. An executive who was highly effective in running a steel 
mill may be quite ineffective in running a professional organization, 
such as an engineering firm, and an executive who was quite ineffective 
in running a steel mill may prove to be just the man for the engineer¬ 
ing position. Many officers who are quite effective in running pro¬ 
duction will do much less well in running a public relations depart¬ 
ment. 


Since we did not find any data directly bearing upon our propo¬ 
sition, we attempted to collect some of it.* 0 The names of thirty-two 
members of organizational elites who had previously held positions in 
military organizations, were picked at random from daily newspapers. 
Their military positions were classified as ’’combat” or "desk” 
positions. Their subsequent civil positions were classified as "ex¬ 
ternalist” or "instrumentalist." "Externalist" positions require 
handling external relations of the organization, such as public re¬ 
lations, labor relations, and serving as contact man in Washington; 
they also include the top positions in universities and voluntary 
associations provided the main task is external (e.g., raising funds). 
"Instrumentalist" positions include only direct administration of 
production and expert staff positions in production, finance, marketing, 
and the like. 

Combat posts, we suggest, require more normative power than desk 
posts, and externalist roles require more normative power than instru¬ 
mental roles. Hence we expected that military commanders who had made 


~^R. M. Stogdill, C. R. Shartle, R. J. Whetty, and W. E. Jaynes, 
"A Factorial Study of Administrative Behavior," Personnel Psychology , 
Vol. 8 (Summer, 1953), pp. 157-164. 


585 






ACDA/E-156 


their career and gained their reputation mainly as combat leaders would 
be more likely to become externalists than instrumentalists, and that 
military leaders who had mainly desk posts would be more likely to 
become instrumentalists than externalists.-^ Note that unlike most 
studies of inter-organizational mobility from one type of organization 
to another, we examined mobility from one type of subo rganization to the 
same analytical subunit in another type of organization. This enables 
us to control for compliance differences in each organizational type. 

Mobility from Military to Civilian Positions 

f* 

Past Military Posts Present Civilian Posts 

« 

Externalists Instrumentalists 

(High Normative) (Low Normative) 

Combat 

(High Normative) 11 1 

De.sk 

(Low Normative) 4 8 

Of the 32 persons, 24 were classified as either externalists or 
instrumentalists in their present positions, and as either combat 
leaders or predominantly desk men in terms of their military career and 
source of reputation. As the above matrix shows, those who held combat 
positions were much more likely to hold externalist rather than 
instrumentalist civilian positions. This finding is in line with our 
hypothesis, since combat and externalist positions have similar com¬ 
pliance requirements; both require more normative power than desk and 
instrumentalist positions, which give comparatively less weight to 
normative controls and greater weight to utilitarian controls. As we 
would expect, then, those who had a desk position in their military 
career were twice as likely as combat officers to hold a less norma¬ 
tive, more utilitarian position in their civilian career. Five had 
such a mixed military career that they were classified as "compound 1 ’ 
types. All of these five also had a compound civilian career—that is, 
they moved back and forth between instrumentalist and externalist 
positions in civilian life. These cases also support our hypothesis 
concerning the relationship between compliance specialization and 
mobility: less specialized actors are better able, both in the mili¬ 
tary and the civilian domain, to move from one compliance structure to 


Leonard Reissman, "Life Careers, Power, and the Professions: the 
Retired Army General," American Sociological Review , Vol. 21, No. 2 
(April, 1956), pp. 215-221. 


586 













ACDA/E-156 


another. ?or three cases the post-military career could not be deter¬ 
mined with sufficient precision to allow classification. This limited 
material seems to illustrate our hypothesis and to lend to it some 

support (the significance level of the above results, computed by 
Fisher 1 s Exact Test, is .0046). 

^ In sum, the first approach we have described sees executives as 

&peciaxists, the second as ’generalists' 1 in knowledge about a 
particular type oi organizational output. We suggest that most top 
executives are generalists in the performances they can supervise, 
but specialists in the type of compliance they utilize in doing so. In 
other words, it seems to us that most executives are more effective in 
one type of compliance structure than in the other two . It may be true 
that all executive positions require the ability to work ’’through” 
people, but there are different ways of doing that--differences in the 
appeals which can be made to lower participants, and in the sanctions 
which can be applied to them. 

Compliance specialization of executives is less apparent than 
performance specialization, in part because there are only three common 
types of compliance structures while there are many hundreds of per¬ 
formance specializations. An executive can move among positions and 
cross many administrative boundaries without changing to a different 
type of compliance structure. In this sense the specialization of 
control agents, of executives, is broader—permits more horizontal 
mobility without loss of effectiveness—than does the performance 
specialization of skilled workers and experts. 


XIV.4.4.1.b Executive Specialization*. Positions and Personalities. 

Our discussion of compliance specialization rests on the following 
,hs sumption: that in addition to positions requiring different types of 
compliance, there are actors who differ in the type of compliance they 
can effectively achieve and sustain, and that these individuals tend to 
be recruited into positions requiring the compliance pattern for which 
they are suited. We expect most individuals to be more effective in 
controlling lower participants in one way than in the other two ways, 
since each type of compliance seems to require a distinctive set of 
personality characteristics, aptitudes, and inclinations. One actor is 
unlikely to have the characteristics required for more than one type 
of compliance position. 

The two distributions, of actors and positions, are related in 
such a way that effectiveness is supported, though never maximized, 
because the mechanisms which distribute persons to positions—self¬ 
selection and organizational selection—are imperfect. One problem 


587 






ACDA/E-156 


lies in the difficulty of determining precisely the compliance 
aptitudes of actors and the compliance requirements of positions, 
even when these are perceived as important criteria for selection. 

Other barriers to effective allocation result from the interference of 
particularistic criteria, such as internal political factors (e.g., 

X would be effective in position Y, but this would endanger the hold 
of the present eline over the organization), external political con¬ 
siderations (e.g., party affiliation), ethnic and racial factors, 
friendships, and the like.^ Nevertheless, although actors do have 
compliance preferences and aptitudes, they are to some degree felxible. 
That is, some role adaptation takes place. (By role adaptation we mean 
changes in a person which occur after he is assigned for long periods to 
a role which initially did not match his need-dispositions. It refers 
to adaptation _to the role, not of_ the role.) 

The relationship between personality types and vocations is 
fairly well established. Goode and Cornish (forthcoming) review a 
large number of studies which show personality differences among people 
attracted to various professions. MacKinnon and Centers showed marked 
differences in authoritarianism among various occupational strata. ^3 
The percentage of authoritarians varied as follows: 50 percent for 
large business; 23 percent for professionals; 33 percent for small 
business; 59 percent for white-collar workers; 51-86 percent for blue- 
collar workers. Applying these findings to an organization, for 
example a business corporation, one would expect to find authoritarian¬ 
ism high among the lower ranks; comparatively low in the middle ranks, 
where professionals are concentrated; and high among the top ranks. 

Other studies point directly to differences in personality struc¬ 
ture between actors holding different organizational ranks. Argyris 
for example, found that personnel lower in rank tended to be more 
submissive, passive, dependent, and subordinate than those higher in 
rank.^4 

But there is very little systematic evidence that would allow us 
to relate differences in personality structure to different control 
positions in various types of compliance structures. We would expect, 
for example, that individuals who have leadership qualities, such as 

50 

Melville Dalton, Men Who Manage (New York: Wiley, 1959). 

53 

William J. MacKinnon and Richard Centers, ’’Authoritarianism and 
Urban Stratification,” American Journal of Sociology , Vol. 61, No. 6 
(May, 1956), pp. 610-620. 

54 

Chris Argyris, Executive Leadership (New York: Harper, 1953), 
pp. 50-55. 


588 







/ 


ACDA/E-156 


persuasive power, vision, ability to verbalize, and the like, would be 
more inclined to seek a career in normative than in utilitarian organi¬ 
zations, and to prefer a utilitarian organization to a coercive one, 
since these organizations differ in the opportunities they offer for 
satisfaction of the need-dispositions associated with leadership 
qualities. 

A study which illustrates the kind of evidence needed is that by 
Pine and Levinson. They show that the more authoritarian the per¬ 
sonality of an aide in a mental hospital (as measured by an F-scale), 
the more custodial (i.e., coercive) and the less "humanistic’' (i.e., 
normative) his orientation to patients and their control is likely to 
be. 


We would expect to find officers or formal leaders of the three 
types of organizations to score differently on a scale measuring 
authoritarianism. For example, authoritarian predispositions among 
prison guards and wardens are probably quite high, lower among fore¬ 
men and corporation executives, and lowest for leaders of democratic 
parties, teachers, professionals, and some other elites of typical 
normative organizations. Again, there seems to be no evidence rele¬ 
vant to this proposition. 

The central point for us is that because of various processes, 
such as self- and organizational selection, there is an association 
between compliance positions and personality types. This, except for 
the flexibility due to role adaptation, defines the limits of effective 
mobility. 

XIV,4.4.2 Transferability of Professionals 

While billions of dollars can be shifted relatively readily by 
legislative strokes and executive decrees, manpower—especially pro¬ 
fessional manpower—-cannot be moved about that easily. It is not just 
a question that while the government can order a contract terminated it 
cannot order let us say a group of biologists to work on cancer re¬ 
search instead of biological warfare, but a question of to what extent, 
even if these professionals are willing to shift—they are able to do 
so... . ... 


*^D. J. Levinson and F. Pine, "Two Patterns of Ideology, Role 
Conception, and Personality Among Hospital Aides," in M. Greenblatt, 

R. H. York and E. L. Brown, From Custodial to Therapeutic Patient Care 
in Mental Hospitals (New York: Russell Sage Foundation, 1955). 


589 







ACDA/E-156 


Our first proposition is that while some professional skills are 
more readily transferable than others, some kinds of men are less 
guidable than others. On the question of sheer transferability, basic 
researchers seem to us more transferable than applied researchers and 
applied researchers more than technologists. The main reason for 
advancing this proposition is that basic researchers* skills are least 
specified to begin with and hence comparatively little conversion must 
take place. Applied researchers are more area specific but not as much 
as technologists. (Each of the three kinds possesses some skills which 
are more readily transferable than others; however, reference here is 
to the overall picture.) 

Concerning guidability, in the sense that an agency of the govern¬ 
ment or a corporation could reassign men to new tasks, the opposite 
ladder holds. Basic researchers subscribe to the notion of autonomy of 
work, we suggest, more strongly than applied researchers, and these— 
more than technologists. Hence the first group can best be transferred 
by reallocation of research funds and changes in relative terms of 
employment and facilities for research but that leaves them free to 
move "on their own" (i.e., via the market of professionals) while 
technologists may be more readily reassigned as a group by an adminis¬ 
trative order. 

Fortunately, there seems to be a correlation between the relative 
guidability of the three groups and their needs to move as a team (a 
need which is hindered when the market mechanism is employed). Move¬ 
ment in teams seems least important for basic researchers, who are more 
likely to work as individuals (or with their younger associates and 
assistants), while applied work, it seems, is more frequently conducted 
in teams, and technologists work not just in teams, but most frequsntly 
in larger organizational units. Again, these are to be viewed as 
statistical propositions. Some basic research is conducted by large 
units and some technologists work by themselves, but across the board 
the differences are expected to hold. (We reiterate that these are 
propositions because the data on these matters are far from complete 
and what is available is far from clear.) 

Reassigning whole professional teams or laboratories makes turning 
around easier, in the simple sense that one act can move a large number 
of facilities and men, and may be necessary if the technologists and 
applied researchers are to have the collaborators, assistants and 
facilities their work requires. On the other hand, however, reassign¬ 
ment as a unit may have a drawback which outweighs all these advantages 
and suggests reliance on the marketplace of professionals for the trans 
fer of all three categories and not just basic research. Without 


590 




ACDA/E-156 


reaking up at least the large-scale units, we fear, the necessary con¬ 
version may not be completed. We do not fear that a missile developing 
unit, assigned to build teaching machines, will continue to produce 
weapons, but we expect that tie unit will find it difficult to make the 
transition if all the people at work on the new assignment used to work 
on missiles. Easier and more complete transition is to be expected if 
individuals (or teams) are integrated into established units which 
already work on teaching machines, to stay with our example, in small 
numbers at a time, allowing the established units to absorb the new¬ 
comers. This seems to us the best means of bringing about the neces¬ 
sary shift of orientation. 

There are several levels to this shift of orientation. One is 
ideological. Each job carries with it a rationale, a myth, a legiti¬ 
mation, from prostitutes (keeping deviance down) to scientists 
(advancing the truth). The myth is particularly articulated and 
internalized when the job is under attack, as for instance the team¬ 
sters or scientists working for bacteriological warfare. In order for 
military personnel to successfully make the transition to a civilian 
mission, the military myth (for instance, the notion that civilian work 
is .a priori less efficient than military, and less important than work 
on national security) must be unlearned and a new one picked up. 


Second, reorientation to the nature of the client is needed. 
Military and space clients are relatively few, very big, with fairly 
clearly identifiable needs and preferences. Civilian clients are 
rumerous, small by comparison, and it is relatively difficult to fore¬ 
cast their needs and preferences. We refer here not only to the 
millions of consumers of the private sector but to the thousands of 
school boards, hospitals, etc., in the civilian public sector. While 
an individual research and development worker is unlikely to have to 
deal directly with those, the differences in markets will indirectly 
affect his work and he needs to be reoriented to face them. 

Third, the military deals largely with a hostile environment, 
while civilians deal largely with friendlier ones, and hence the con¬ 
cern with making the civilian product immune from tampering is much 
smaller. 

On the other hand, military research and development, at least 
until recently, could count on favorable support from the key commit¬ 
tees in Congress, while civilian programs, at least until recently, 
frequently faced a critical environment, requiring frequent payoffs 
and not allowing for sufficient time to test and develop a program. 
Lead times are hence shorter for civilian projects and tolerance for 
failure much lower. 


591 



ACDA/E-156 


There are many other ways professionals must be reoriented; we do 
not seek here to exhaust the list but rather to illustrate the need for 
considerable reorientation. Further, we hold that, until it is proven 
otherwise, such reorientations are achieved more easily and completely 
through reassignment of individuals or segments of a unit rather than 
through reassignment of the unit as a whole. 


XIV.4.5 Option D: Transferability of Knowledge: Systems Analysis? 

It is the special quality of knowledge that you can give it and 
keep it at the same time; it does not conform to the traditional laws 
of scarcity. Knowledge-manpower and facilities are scarce; but, while, 
if you assign to someone else a programmer or a computer, you no longer 
have it, you may invest a million dollars in developing a program for a 
computer, make a copy for a few dollars, and make it available to 
another organizational unit and save it a million dollars without in¬ 
creasing your costs or reducing the value of your program, especially 
if you are not in the private sector. (The deeper reason for the un¬ 
usual quality of knowledge is due to its being a pattern of symbols 
while the other transfers deal with objects.) ^6 

Each modern organization generates and consumes vast amounts of 
information which, when synthesized, become knowledge. Most of the 
knowledge produced by the military service is of little value to 
civilian organizations nor can it be converted. This includes most of 
the information about weapons, tactics of warfare, military intelli¬ 
gence, etc. Regarding technology—"The first myth is that most 
defense technology i£ marketable in the private sector. Though a 
great deal of defense technology is "technically" applicable to the 
private sector, much of it is not marketable .^ It concerns such 
matters as the number of submarines the USSR has and the number of 
persons an H-bomb exploded in Columbus Circle would kill. 

Nevertheless a claim is being staked that the defense and space 
industries, especially the related "think tanks," have identified a 
"scientific" method for managing large-scale projects, the Apollo 
program for instance, and that while specific items of information may 
not be transferable, the method is. The method has been variously 
described as systems analysis, operations research, cost-effectiveness, 


We elaborate this point in The Active Society , pp. 22ff. 

^From a speech by Rodney W. Nichols of the Office of the Di¬ 
rector of Defense Research and Engineering before the National Security 
Industrial Association's Research and Development Symposium, Washing¬ 
ton, June 12, 1969. p. 3. 


592 







ACDA/E-156 


and PP3S (for Planning-Programming-Budgeting-System). For the insider, 
t ere are significant differences among various versions of these 

approaches; for the outsider, they may be treated jointly, as we shall 
do for the issues at hand. 

The origins of Systems Analysis (the term we use to refer to the 
whole set) seem to lie in studies conducted during World War II con¬ 
cerned with military equipment in Britain.They found wide applica¬ 
tion on this side of the ocean, especially at RAND. The Pentagon 
introduced the method widely while Robert McNamara was Secretary of 
Defense. In August 1965 President Johnson ordered the introduction 
of Systems Analysis in domestic agencies. Here the approach never 
took root successfully. Since then Systems Analysis has come under 
heavy criticism in the military area, and it is now less favored even 
in the Department of Defense than it used to be. 59 Still, the largest 
claim that the space and military industries and organizations can 
contribute knowledge successfully to the solution of civilian problems 
lies here. 

First, the nature of the claim which is being staked must be 
indicated: 


The civil systems approach which is evolving from defense 
systems experience offers two prospective benefits to the nation: 

1. It may be a powerful tool for helping decision-makers 
deal with complex national and local problems. 

2. It may offer opportunities for diversification (and a 
limited degree of conversion) to defense-dependent 
firms and their personnel. These adjustment processes 
could help in dealing with the economic impact of cut¬ 
backs in defense spending. 

The civil systems approach is concerned with solving civil 
problems: problems in the non-defense aspects of Federal, state, 


58 

P. M. S. Blackett, Operational Research (London: British Associ¬ 
ation for the Advancement of Science, 1948), reprinted from The Advance¬ 
ment of Science , Vol. V, No. 17 (April, 1958), and his Studies of War , 
Nuclear and Conventional (New York: Hill and Wang, 1962). 

^According to Time fVol. 94, No. 9 (August 29, 1969), p. 17H 

’’Another McNamara favorite that has lost influence is Systems Analysis 
" 

• • • 


593 









ACDA/E-156 


and local government. 


60 


"The new techniques...are beginning to be recognized as 
the greatest advance in the art of government since the intro¬ 
duction nearly a hundred years ago of a civil service based on 
competence," according to one observer of the new interest in 
the civil systems approach.61 This enthusiastic claim is not 
yet proven, although it may well be true.^^ 


The main features of Systems Analysis have been described 
as follows: 

1. Bounding the problem; defining objectives for solving 
it. 

2. Developing and comparing alternatives for achieving 
objectives. 

3. Furnishing comparison information and selection cri¬ 
teria for decision-making. 

4. Designing and implementing the required policy, organi¬ 
zational, or hardware systems. J 


Generally, the systems approach involves identifying the 
problem or the threat, learning and describing the environment, 
and defining the objectives which must be achieved to counter 
the threat or solve the problem. Alternative methods of meeting 
these objectives must be considered, and the most attractive 

concept is then elaborated into the design of a system. 4 

_ ..2 -- 

60 '' 

John S. Gilmore, John J. Ryan, and William S. Gould, Defense 
Systems Resources in the Civil Sector: An Evolving Approach, An Un¬ 

certain Market , Prepared for U. S. Arms Control and Disarmament Agency 
(Washington: Government Printing Office, ACDA/E-103, July, 1967), 
p. vii. 

61 Max Ways, "The Road to 1977," Fortune , Vol. LXXV, No. 1 
(January, 1967), p. 95. 

62 

John S. Gilmore, et al ., Defense Systems Resources... , p. 5. 

^Ibid., p. vii. 

64 

Ibid ., p. 5-6. For several good descriptions and analyses of 
this approach, see Stephen Enke (ed.). Defense Management (Englewood 
Cliffs, New Jersey: Prentice-Hall, 1967). 


594 













ACDA/E-156 


Basically the systems approach is rationalistic. It assumes a 
capacity to clearly state the goals (the threat or the problem), to 
order them, to express them in quantitative terms, and to hold them 
constant. It further assumes that we have a capacity to depict fairly 
accurately the environment and the alternative routes leading from the 
present condition to the goal or goals stated. Careful arguments 
have oe£n advanced to show that under most conditions it is not pos¬ 
sible to even approximate these requirements.^ 

We have very little evidence of studies from critical observers. 
The authors of a recent detailed study of the applicability of defense 
systems resources to civilian problem areas were unable to present un- 
equivocal conclusions.^ Most of the studies available are those of 
advocates or favorably-oriented outsiders. ' An exception is found in 
the following remarks of an experienced systems analyst: 

There is no question but that research and development 
and systems analysis has been drastically oversold in terms of 
what it can do for the civilian market. If you look at the 
real capabilities of the industry you will pretty much find it 
restricted to huge operations where large aggregations of per¬ 
sonnel and capital are put to work on high-quality, high- 
technology problems. Few major problems meet these criteria. 

Even if the technology of the aerospace industry is in some 
sense applicable to urban problems, it just doesn’t take that 
many people. Another problem deals with whether we are dis¬ 
cussing research or production. It is clear that the money 
lies in the development and production side of things rather 
than research as such, and the aerospace firms have not as yet 
been convinced that there will be a large production run as the 
ultimate payoff if they get into the civilian market. 


Charles E. Lindblom, M The Science of ’Muddling Through,’” 

Public Administration Review , Vol. XIX, No. 2 (Spring, 1959), pp. 79-88. 

^John s. Gilmore, et al ., Defense Systems Resources... , Chapter 8. 

67 Elizabeth Drew, "HEW Grapples with PPBS," The Public Interest , 

No. 8 (Summer, 1967), pp. 9-29. 

66comments by a staff member of one of the major "think tanks" 
associated with systems analysis, given in an interview with Bernard 
Udis, March 11, 1969. 


595 







ACDA/E-156 


On the basis of a year's observations in Washington, D.C., the 
following statements concerning the effectiveness of Systems Analysis 
seem Vcilid to us: 

1. In some instances, the rationalistic model is useful, 
especially for mass aggregate technological systems (such as an auto¬ 
mated telephone system), that is, those in which there are a large 
number of units (helpful to quantification) and where the non-human 
element is predominant. As there are both military and civilian 
systems which have these attributes. Systems Analysis, developed in 
the military, has clear civilian application, for instance, for 
traffic control. * 

« 

2. For systems in which the human elements are more potent, e.g., 
in educational networks. Systems Analysis is either loosely applied or 
faked. In the first approach, rough figures and estimates are used 
not only to substitute for descriptive data which is not available but 
for assumptions about relations among variables. For instance, not 
only do model builders make assumptions about the costs of books 
(e.g., that they are roughly $5 on the average), but they also assume 
that cutting the cost by half would lead to three times more reading. 

If one asks, why three times and not 2.6 or 16?—one always gets an 
answer in the form of an argument or conjecture but rarely empirically 
verified statements. 

Such hypothetical data and relationships, mixed with bits of 
evidence, are the fuel of much domestic Systems Analysis; without 
them it would come to a halt. 

The value of the projections based on very crude estimates and 
artificial assumptions lies mainly, not in the specific forecast which 
results, but in that it helps to develop a sense of the factors in¬ 
volved and the possible relations among them, and calls attention to 
possibilities which otherwise might escape one's attention and brings 
into the open hidden assumptions, even prejudices. That is. Systems 


69 

"The real strength of aerospace companies is their technical 
capability. The strong and often unique capabilities of the industry 
are engineering accomplishment, technical systems management, meeting 
major national requirements, and serving government markets. How to 
mate these capabilities with the requirements of nondefense business 
may be the challenge and the problem." (Murray L. Weidenbaum, "De¬ 
fense Cutbacks and the Aerospace Industry," in John S. Gilmore and 
Dean C. Coddington, Defense Industry Diversification , p. 311.) 


596 




I 


ACDA/E-156 


Analysis in domestic circumstances, still does offer a powerful heuris¬ 
tic device. Its main value lies in its mind-stretching quality, in its 

C r\ q 1 (* -T r • . ^ itS rigid application, as if the 

speci ic igures given prove anything or can be relied upon in any way. 

Finally, there is the deliberate slanting of figures and assump¬ 
tions so as to make the model (or computer) print out the desired 
conclusion, expressed in technical symbols and seemingly scientific. 
Especially in areas where data is soft and theory just budding, the 
abuses of Systems Analysis seem rampant. In a brief informal survey, 
we found civilian agencies, especially local governments, more in¬ 
clined to crudely manipulate Systems Analysis, while the Military seems 
to do so with greater finesse. As finesse means here, among other 
things, greater attention to the real figures, and hence to reality, 
more transfer of military accounting schemes and experience may make 
civilian agencies more "honest" in their Systems Analysis, unless, of 
course, the poorer data and theory available, especially in reference 
to systems low in technological factors, do not allow a much higher 
level of application at this stage. 

The main point of all this is that even if there were no diffi¬ 
culties whatsoever in transferring Systems Analysis from military and 
space missions to domestic ones, the weakness and limitations of the 
whole approach, and especially its diluted or misapplied versions, 
must be guarded against. 

Second, there is a major difference in the mission areas which 
must be taken into account. In the military, systems which are 
centralized, bureaucratic, highly controllable, and rich in techno¬ 
logical elements are prevalent. Civilian systems are frequently de¬ 
centralized, pluralistic by comparison, and less technological. The 
conclusion is not that Systems Analysis cannot be transferred, but 
that it is much more applicable to some civilian missions (de-pollution 
of water and air, traffic control, weather control, radio frequencies, 
etc.) and much less to others (drug addiction, education, psycho¬ 
therapy) although even these will have some components in which it 
could work (e.g., mass urine tests needed for methadone programs). 

XIV.4.6 Conclusion 


To turn around, the societal will must be built; it does not 
spring into being because there is an objective need to turn from 
military to domestic priorities, or because a Presidential or Con- 
gessional interest is announced. It must be constructed out of a 
coalition of interest groups (private and public), and public opinion. 


597 



ACDA/E-156 


Without such a systematic buildup of support, a significant turn is 
unlikely to occur. 

Assuming there is a well-founded and broadly based commitment, 
we still need the instruments to implement it. These include 
decision-making which goes beyond incrementalism to policy making and 
organizational networks which are less fragmented than civilian ones 
are now. The reasons the market rather than administrative mechanisms 
should be relied upon as the main tools of turning around rather than 
changing the missions of the military itself, have been explored. In 
part, they lie in the prerequisite of conversion, in part in the need 
to sustain the civilian potency and the civic society. 


4 ' 


T 


598 





ACDA PUBLICATIONS ON THE ECONOMIC IMPACT 
OF DEFENSE AND DISARMAMENT 
IN THE UNITED STATES 


GENERAL 


* Economic Impacts of Disarmament (ACDA 2), January 
1962. 

* The Economic and Social Consequences of Disarmament 
(ACDA 21), June 1964. 

* The Timing of the Impact of Government Expenditures 
(ACDA/E-157), University of Pittsburgh, November 1970. 

MEASUREMENT 


Survey of Economic Models for Analysis of Disarmament 
Impacts (ACDA/E-59), University of Michigan, July 1965. 

A Study to Measure Direct and Indirect Impacts of 
Defense Expenditures on an Economy (ACDA/E-85), 
University of Washington, August 1967. 

* An Economic Impact Study of the Minuteman II Weapon 
System (ACDA/E-125), Research Analysis Corporation. 

INDUSTRY 

* The Implications of Reduced Defense Demand for the 
Electronics Industry (ACDA/E-48), Battelle Memorial 
Institute, September 1965. 

* Defense Industry Diversification (ACDA/E-68), 

Denver Research Institute, January 1966. 





Industrial Conversion Potential in the Shipbuilding 
Industry (ACDA/E-66), Midwest Research Institute, 

May 1%6. 

* Defense Systems Resources in the Civil Sector (ACDA/E-103) 
Denver Pesearch Institute, July 1967. 

The Management of Growth and Technological Change 
(ACDA/E/RA-15), Northeastern University, August 1967. 

Technological Innovation in Civilian Public Areas 
(ACDA/E-118), Analytic Services, Inc., August 1967. 

The Processes of Technological Innovation: A Con¬ 
ception Systems Model (ACDA/E/RA-35), George Washington 
University, January 1968. 

Defense Dependency of the Metalworking Machinery 
and Equipment Industry and Disarmament Implications 
(ACDA/E-130), Resource Management Corporation, 

June 1969. 

MANPOWER 


* The Dyna-Soar Contract Cancellation (ACDA/E/RA-13), 

State of Washington Employment Service, June 1965. 

'■4 

* (I) Post Layoff Experiences - Republic Aviation Workers 
and (II) The Transferability of Defense Job Skills to 
Non-Defense Occupations (ACDA/E-69), State of New 
York, Department of Labor, August 1966. 

* Reemployment Experiences (ACDA/E-67), Martin Marietta, 
December 1966. 

* The Transferability and Retraining of Defense Engineers 
(ACDA/E-110), Stanford Research Institute, November 1967. 

The Potential Transfer of Industrial Skills from 
Defense to Non-Defense Industries (ACDA/E-102), 

State of California, Department of Labor, June 1968. 



.JS > » 


* R e employment Experiences of Defense Workers (ACDA/E-113), 
University of Colorado, November 1968. 

Pensions and Severance Pay for* Displaced Defense 
Workers (ACDA/E-138), University of Illinois, July 1969. 

# Characteristics of Potential Unemployment Problems 
in Vietnam Procurement Reductions (ACDA/E-168), 

Research Analysis Corporation. 

REGIONS i 


Adjustments to Reduced National Defense Expenditures 
in New Mexico (ACDA/E-58), Kirschner Associates, 

January 1966. 

* Community Readjustment to Reduced Defense Spending 
(ACDA/E-57), National Planning Association, January 1966. 

Community Information System (ACDA/E-88), National 
Planning Association, July 1967. 

* Ammunition Production for Vietnam-Impact on Southeast 
Kansas (ACDA/E-142), Midwest Research Institute, 

February 1970. 

Economic Impact of Military Base Closings (Vol. I 
and Vol. II) (ACDA/E-90), University of Kansas, April 
1970. 


Copies of completed studies which have been printed by 
the Government Printing Office may be purchased directly from 
the Superintendent of Documents, U.S. Government Printing Office, 
Washington, D.C. 20402. Several other reports are available 
in limited number in ACDA and may be obtained on request to 
RIC, U.S. Arras Control and Disarmament Agency, Washington, D.C. 
20451. Copies of research reports have been forwarded to major 
public and academic libraries in the U.S. and to U.N. libraries 
in New York and Geneva. 


* U.S. Government Printing Office 

# Forthcoming Publication 


i 

















■ 


































































BD - 7 6 




















































o ^ 

v, * 

i \ s . * , C\ 

v % A° ►' 

• V £ '■ 

r <P <3 



,* ... 


» -* 
* 'V <t> 


6" ^ 


vT 

v/V ° 

Vi* °» «>}'-* 

<>, *'<>.*-' A <v **7Yi* .G v ~ 'O 

<£ sj£l*. ++ ,0* V-*" ° 



A. 

■77// N 

7/4jt > 

4* 7? 

. * 

K> 8 ( 

V V 

i ^ - 

v x 

n,'v V 

.A 





^ 0 


4 O. 1 
> <y M 

* - N o ■ 

* o 1 


*’* v/aV. 1 


I B 



^ \w 

' s 

//Jr ^ 


_ * 

rf> * / 

- *> 

1 V 

A?° <> 

A^ 



vX„ <*& o'» '/v r 4 


r o K 



sr*V 



o \0 *7*> 

* «» V \-z4yi) 1 * * f- 

. 0 . * 4 - r 

o " 0 A o ^ • ** <y mm 


& 




f v 0 , 

^ <y ^ °* 

<> < 0 ^ 

' ^ / s'J&L* °o <* v . 

* ^ * &nf//yl 2 , _ *n v 



O' 



o V 


* A v » 

4 9> & 

* A <* *0’ ^ "»•* 

G • c. 0 N 0 * <£* 0 ^ «*■‘ * •♦ o 

* C S^srKhu - O 

• ^ 0 




^ 0 s 

„ <A°t. tp-r. ■ "V^m: A°t. *.©§^w a a, v ’. 

' 1 ‘ Ap °^> * 0 - 0 0 A° ^ * ° ' 1 ‘ <& °-U * 0 H 0 ° A 0 ^ * * ' ’ * <& °A 

v c\ <o v •'•*» > v" ^ a 0 ^ *1*®-- > v % .viM/* c 

A I* * >»*P' V (i 5 • a A V s *. x*^ 

v «■ . ■^ v . A ♦ Ai . 0 a^ 1 «■ C^rrc^f, • A 



' a v *x. 

/ ** ^ 

* A <V ' * * * A v 

A' C.° N0 * <^6 ^0^1 

A ^ C 1 

* 5 bt i v ^ 




■ v ° 

o 

^ ^ 'p ' H 

' a - °* A^ 0 0 V* * ,0 

N rr C + l 




L * * 


o 


M 0 



to 

IWJ* aV^, - 

o v.*- a <v *0 

•» ^o A o 0 " 0 -» 0^ 

- O 1 * 0 - • r^^rv * 'P r. «• 

<N v ^sS>\\Yi > ^'' 'y' 

av ,"r>- o 

O V 





y** 

v\ 


>0 4S 0 ** " ^°’ 7 ^* J. 

0 *° % '“'‘ <? v *‘'■” , a° v *••’• y ■ %. a° 4 

<<y > v s* * * % c\ o v ^ v % *l^(Lz+ ^ a0 v 0 v * °- ; 

4 * A S % '• 

^ > AA ^ 

X. y --‘' A°' ... V A v ... V '■'•••' A° c '■ 


c' 

r% Cy 18 



° W ; 

; <£ %. \ 

* <xy & * 



* A A 

■>> AV • 

<v v ^7. s ^ 0 V '*».»* A 

^ "y^ * ^ * &’(ii//x?-, s> ~ «, 'iSNXMTy^^ *y 




<► ^ 

* . ,^_ 
<* ^ 4 

> 0 * < ' ^ > * Q! ^^ ^ ^ I 

" *r °- 

* C'* .0' ^ ^ '> \s **.v^ c 



« 

*10 * — a; v\ 

^ ~ tAAJ} 1 # * y r^ -'^ UXNX ' V ^ ' ^ 

, * /' c v u •» O. ^ 

^ * # 1 * A> ^ * 0 “ 0 ■ ' • /V V/* 

• V A frttbr. \ ^ >mi£\ % £ »TV—/w. 

: Vv ;^|^. vf •• 

av '‘WASW- a v V - - 

4 <“7 V 1 *1 vJipLXK * AV V. • 

„ 1 A v . •?■ r* I -Wj^ , 4_v" -A . (S^ v 

<* 'V..' ,Cr o 'o..' A <v *'..«> . 0 ^ V *...* A V a' 

N 0 ♦ <?> f*V t > » ^ ° w o * ^ p.v i < « <J)A o N o ' < X> r\V 

‘ <► -P r U fc /XtA * \ 3 i'O' » cASN\ «► *P /*to t nfa ~ .-> .-A. „ C ^r<v, ^ AA /U 

^o< :§MA' v ov 4 ; 

,® ^° ^ <?5 ^ e ,0 vv A ^ 

0 ^ ^ o ' ,, > li ^^* >, 0 "V o I 

> ^° V /o'. ^ V ^Vl'^ Ov A.0' **•«*_*> v" . V s •-* v 1c 

* ^ ♦ .(A^if A 0 ^ <tr <& 

y*V Vv 

> ' J \ o * A A *■ ^^iKiim ^^ 0 A A A- -» < ^miiiii^ J ° o 

* A» v\ a * A^ .-^1 o K/Jj&Vk * AV *y 4 • tt/JlillKA A 'P-v ° ’U 

o. V.*- ^ <v +<A>* X£ o 'o.*- A <, v;^ ^0^ ^ -r.»* j 

•i -‘^k<- V . ^ «W^\ 0 / .•^n<- V c° iV^* °o j- 

". .g3m££' "*b& °£wi2%- v a ->*_ a «■ 



X ^ A 
* A 0^ 







.d 


O’ 


^O v* 
















t, <g 






o « « „ 

tv*” ^ 

,N V <£ssS\\t^* ’T’ 


° ^ ^ o 

. r-c- *> <i* * 

<* V ^. 4 <G^ *b 


- *b V ° 

s°* *° ^ V 

O *>" ' v 'V^3' r * • 0 “i * ' ^ 

o *...• .0° V *•< 

* ^ & ♦ mA p 0 ** 

• • aV-* :«| 

«* $ % • 



,0* , • - •. *< 
G y~/r?^ -r 


<> *'.. * 4 <G 



r O ».^.« o*' <X * 4.‘ 

Vf> ® « ° a u <X * i ■» .4y 

, 1 * ' / O (N V- y . ✓V . V c . • 

iV<fifk v , A*' **, «?* ^ V sLw' 






o N 



% *~%° v y • *rr, • ’ y 1 ^ 

XJ .m'V 


6 0 " ° * ^ 


c> *o . * - A 

^ A 

o A 

o yv' * 

b *0 P : 

? P •%_ v w/ ,^ 

0 ,> \> s s V ' 

f * . ( 3 . 5 * * 

♦ 


* <y 



<£V <A 
** ^ *\ 



0^ . t ' ' * ^o 

c *W03^% 0 y ^ * 

“bv 4 



A \ " %, < A ’ • * 

■t* ** 

* 



L W 




> ^5 »', 

* oj^ O b 
^ * 0 " 0 '° 


V 


o \0 7j 

\ V tf. 

„ • 0 ^ 

‘ 0 * 0 * 0 ‘'ail 

^ ^ a 0 *!,•«- > V y %***'* 'CV 

• X y <M- ^ ^ & r 

<j»v •«¥%•. • 

v^ £,o^ A-^. - 

* «? <P>, oVJj§AF* av 

♦ --V’'. ' . -vv- V^-vjc^, - - W ■VMJV4&* \ <|V 4 & '& 

C> v ‘ #s A° ' 0 -‘ 4> A <, <G^ ^> 'o.A A <v 4 '-VA" .G 

•<^a r 0^ . L ' - a aV' 0 0 " ® -* 0 ^ .«•'*♦ ^o A^ 0 o« o „ 0^ 

. ^ . C ♦jw 35 ^, /^SSUT-. , C ♦Wfe,*, 0 A*®” ^ ^ ♦* 


0 



*■ <1 ^ O -i" ^NpX- . r) *-, * 

4 V °^. * * “ 0 ° A 0 * 0 * ’ . 

v% ^ ' a0^ *'*£* > V s » 

° ^ ^ A^ * ■ 

: ^ s s Vv 

* aV-\ 1 ^p|np^ *» a ^ o 

w -- - <y <> *< •* s % a g ^* "° • * * a 

^o 4 G c 0 " 0 * Xti 0 v » x 1 ' * ■* o c 

0 -r V , <r ° . A / 





•*W 



; a ^ . 

4- * »* A <v. » 

<?» " ’ A %■ ° • 

y *y<x ^ v % ',lva» 


^O ; 


,* >° A . 

.0 



4 °, 


s y. y “ 


n" ~4* * ^ 

a° b ' 1 Ar 

*y a * °- ^ v % s s# *' 

k * A / 



0 ^ * 

*° A % A « ' 

<v * 77 , * * G^ 'o. * - A 

G v c o« e># <* ^ .'•** ,o« 

+ ^ (r A^>/XXZ-, -r o 





■» o 

'X A N o 

oV . __ 

A y j,. •» -a5 o"A. 

_ ^ ~^u\\Vsx* ' ^ ^ * ^y// Vs? ± k~ „ -^^llWvss^ ' ^ yy. *• 

c\ o* A ^ * 7 *^.* ^ ° 0 -** '^V A *4, 

0 « 0 A 0 ^ "' 1 A 0 « 0 A 0 ^ •' 

-v a 0 h**®^ > V AVL'^ cv 0 A * > 

A J -Wr. ^ ^ *‘dSfe'- A A ♦- 

A^p a v ^a - - c- 

* A/ ^ o 4/•'A. • ^ ■* Ap 

^ V' -X - r * s * a g ^ '••I* A <, * 4 G^ 

0^ • L ‘ 8 Ji ^O 0 0 W 0 -» ■ < ^£ 0 ^ t • 1 1 6 a o , 0^ ^ ^ q*^ ^ . l * 

• _r^<v - ^ »y G + nO^l-, 

. ^ 0 
4 O. 

A -X. « 

* 0 . 0 ’ .o- 1 v A °*. ♦..*’ A° V. *••’• .A °i. *•. 






* 4 o. • 

v <C V *" 





* 

•k /.V v\ » 

4 ^ <P -. 


^) 'o. A A 

A> 0 « o 

°- 1^ ^ 

<N «, *x 

^ K 0 




® >y 0 ^ 

A \ * w y 

y ***®- > V % ‘ s "' 

° ; 

c GJ b 

^ ^__ y .v ^ ^ 

b *^-!‘ J ,, % '••** ^ •■- <*. *' 

^ 0 A’ t • 0 




T O 




** A. 

x , V v 'V*‘ 

A c 0 « 0 „ <« 

• _r^Xv * ^ V 1 

•» A y *> 

^o 0 

^ 'S 42 M&? 


* * * \ G 'Xy ” • * \ ' 's >. 

. 1 •»4 ^o jy 0 ° M ® -» ^ 

u» *^*» 4 ffi '\\//s / yy~ v>> A- 

. ^ o' • ! o v 


A s' xy 


C\ 




























































